Critical Survey: Westpac Banking (NYSE:WBK) and Grupo Financiero Galicia (NYSE:GGAL)

Westpac Banking (NYSE:WBK) and Grupo Financiero Galicia (NASDAQ:GGAL) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, profitability, earnings, valuation, analyst recommendations, risk and institutional ownership.

Earnings & Valuation

This table compares Westpac Banking and Grupo Financiero Galicia’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Westpac Banking $28.76 billion 2.35 $6.16 billion $1.74 11.31
Grupo Financiero Galicia $2.98 billion 1.67 -$123.04 million $3.59 9.72

Westpac Banking has higher revenue and earnings than Grupo Financiero Galicia. Grupo Financiero Galicia is trading at a lower price-to-earnings ratio than Westpac Banking, indicating that it is currently the more affordable of the two stocks.

Dividends

Westpac Banking pays an annual dividend of $1.29 per share and has a dividend yield of 6.6%. Grupo Financiero Galicia pays an annual dividend of $0.30 per share and has a dividend yield of 0.9%. Westpac Banking pays out 74.1% of its earnings in the form of a dividend. Grupo Financiero Galicia pays out 8.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Westpac Banking has increased its dividend for 2 consecutive years and Grupo Financiero Galicia has increased its dividend for 5 consecutive years.

Analyst Ratings

This is a summary of current recommendations and price targets for Westpac Banking and Grupo Financiero Galicia, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Westpac Banking 3 3 1 0 1.71
Grupo Financiero Galicia 2 1 1 0 1.75

Grupo Financiero Galicia has a consensus target price of $20.00, suggesting a potential downside of 42.69%. Given Grupo Financiero Galicia’s stronger consensus rating and higher probable upside, analysts clearly believe Grupo Financiero Galicia is more favorable than Westpac Banking.

Volatility & Risk

Westpac Banking has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500. Comparatively, Grupo Financiero Galicia has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500.

Insider and Institutional Ownership

0.5% of Westpac Banking shares are held by institutional investors. Comparatively, 25.7% of Grupo Financiero Galicia shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Westpac Banking and Grupo Financiero Galicia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Westpac Banking N/A N/A N/A
Grupo Financiero Galicia 20.31% 31.89% 3.42%

Summary

Grupo Financiero Galicia beats Westpac Banking on 9 of the 15 factors compared between the two stocks.

About Westpac Banking

Westpac Banking Corporation provides various banking and financial services in Australia, New Zealand, Asia, the Pacific region, and internationally. It operates through five divisions: Consumer Bank, Business Bank, BT Financial Group, Westpac Institutional Bank, and Westpac New Zealand. It offers everyday banking, savings, term deposit, moving to Australia, under 21 and student, business one, community solutions one, not-for-profit savings, and foreign currency accounts; term and farm management deposits; debit, credit, and travel money cards; home, personal, investment, small business, and commercial loans; and equipment, automotive, cash flow, property, insurance premium, corporate and structured finance, and trade and supply chain financing services. It also provides home and content, landlord, car, travel, boat, caravan and trailer, life, credit card and loan repayment, income protection, business, farm pack, person income, and business overheads insurance products; superannuation and retirement products; investment portfolios; instalment warrants; and trading, financial advisory, wealth, foreign currency exchange, international payment, cash flow management, international trade, and import and export services. In addition, it offers industry specific banking and treasury services; other services, such as emergency cash, online and telephone banking, ATMs, unclaimed money, travel center, margin lending, and banking services to migrants moving to Australia; and mobile wallets. Further, it provides capital advisory and fund management, transactional and private banking, and financial market services. It serves individuals; micro, small, and medium enterprises; and commercial, corporate, institutional, and government customers. The company was formerly known as Bank of New South Wales and changed its name to Westpac Banking Corporation in October 1982. The company was founded in 1817 and is headquartered in Sydney, Australia.

About Grupo Financiero Galicia

Grupo Financiero Galicia S.A., a financial services holding company, provides various financial products and services in Argentina. The company operates through Banking, Regional Credit Cards, Insurance, and Other Grupo Galicia Businesses segments. It offers corporate banking services to companies; credit and debit cards, loans, and financing advice to various agricultural-sector clients; foreign trade transaction services; and e-banking services. The company also provides checking and savings accounts, credit and debit cards, payroll direct deposits, and other services to individuals, businesses, retailers, and professionals; and financial investment alternatives, such as deposits, FIMA mutual funds, government and corporate securities, and shares and trusts. In addition, it offers time deposits; retirement insurance services; life insurance, including employee benefit plans and credit related insurance; property and casualty insurance products, such as home and ATM theft insurance; and insurance brokerage services, as well as issues, credit cards. Further, the company issues deposit certificates and warrants to the agricultural, industrial, and agro-industrial sectors, as well as exporters and retailers. As of December 31, 2017, it had 306 full service banking branches; and 1,982 ATMs and self-service terminals. Grupo Financiero Galicia S.A. was founded in 1905 and is based in Buenos Aires, Argentina.

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