Analyzing Societe Generale (SCGLY) & HDFC Bank (HDB)

Societe Generale (OTCMKTS: SCGLY) and HDFC Bank (NYSE:HDB) are both large-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Volatility and Risk

Societe Generale has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, HDFC Bank has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500.



Dividends

Societe Generale pays an annual dividend of $0.42 per share and has a dividend yield of 4.8%. HDFC Bank pays an annual dividend of $0.55 per share and has a dividend yield of 0.5%. Societe Generale pays out 36.8% of its earnings in the form of a dividend. HDFC Bank pays out 21.8% 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. HDFC Bank has increased its dividend for 5 consecutive years.

Profitability

This table compares Societe Generale and HDFC Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Societe Generale 11.97% 8.72% 0.43%
HDFC Bank 18.23% 16.17% 1.83%

Insider and Institutional Ownership

0.5% of Societe Generale shares are held by institutional investors. Comparatively, 17.3% of HDFC Bank shares are held by institutional investors. 1.0% of HDFC Bank shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for Societe Generale and HDFC Bank, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Societe Generale 1 1 1 0 2.00
HDFC Bank 0 0 2 0 3.00

Valuation and Earnings

This table compares Societe Generale and HDFC Bank’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Societe Generale $27.06 billion 1.30 $3.17 billion $1.14 7.67
HDFC Bank $12.17 billion 7.19 $2.17 billion $2.52 40.31

Societe Generale has higher revenue and earnings than HDFC Bank. Societe Generale is trading at a lower price-to-earnings ratio than HDFC Bank, indicating that it is currently the more affordable of the two stocks.

Summary

HDFC Bank beats Societe Generale on 12 of the 16 factors compared between the two stocks.

Societe Generale Company Profile

Société Générale Société anonyme provides financial services in Europe and internationally. It operates through three segments: French Retail Banking, International Retail Banking & Financial Services, and Global Banking and Investor Solutions. The company offers retail banking services to individual customers, professionals, and corporate and non-profit clients under the Societe Generale, Crédit du Nord, and Boursorama brands; and international retail banking and consumer credit services to individual and corporate customers in Europe, Russia, the Mediterranean Basin, and Sub-Saharan Africa. It also provides life, retirement savings scheme, personal protection, group retirement, dependence, annuity, auto and home, personal accident, school, individual personal protection, non-life, and other insurance products; vehicle leasing and fleet management services; and vendor and equipment finance services. In addition, the company assists corporates, financial institutions, public sector institutions, and family offices in terms of investments, strategic advisory, capital raising, and capital structure optimization; and offers structured finance, and investment and risk management solutions. Further, it provides access to market through solutions equities, fixed income and currencies, commodities, and alternative investments; private banking services, including asset allocation, portfolio management, funds, markets, and wealth management solutions to high net worth individuals; and asset management solutions. Additionally, the company offers securities services, such as clearing, custody and trustee, liquidity management, fund administration and asset servicing, fund distribution, and global issuer services. Société Générale Société anonyme was founded in 1864 and is based in Paris, France.

HDFC Bank Company Profile

HDFC Bank Limited provides a range of banking and financial services to individuals and businesses in India, Bahrain, Hong Kong, and Dubai. The company operates in Treasury, Retail Banking, Wholesale Banking, and Other Banking Business segments. It accepts savings accounts, salary accounts, current accounts, fixed and recurring deposits, demat accounts, safe deposit lockers, and rural accounts, as well as offshore accounts and deposits. The company also offers personal, business, home, consumer durable, car, two wheeler, gold, educational, rural, and term loans; loans for professionals; loans against property, securities, and assets; overdrafts; government sponsored programs; and working capital, healthcare, channel, short term, structured, dealer, and vendor finance, as well as agricultural lending. In addition, it provides credit, debit, and prepaid cards; private banking services; export, import, remittance, bank guarantees, and letter of credit services, as well as merchant and cash management services; life, health, motor, travel, and home insurance products; and investment product, such as mutual funds, equities and derivatives, IPO, and bonds. Further, the company offers bill discounting, real time gross settlement, bankers to right/public issue, forex, money market, employees trusts, and tax collection services; and investment banking services in the areas of project appraisal, structured finance, loan syndication, debt capital markets, equity placement, mergers and acquisitions, corporate advisory, and capital market advisory services. Additionally, it provides correspondent banking, settlement, custodial, disbursement, clearing, and administrative and fiduciary support services, as well as online and mobile banking services. As of March 31, 2017, the company operated a network of 4,715 branches and 12,260 ATMs in 2,657 cities/towns. HDFC Bank Limited was founded in 1994 and is based in Mumbai, India.

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