Analyzing Mitsubishi UFJ Financial Group (MUFG) & Royal Bank of Canada (RY)

Mitsubishi UFJ Financial Group (NYSE: MUFG) and Royal Bank of Canada (NYSE:RY) are both large-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, analyst recommendations, profitability, dividends and valuation.

Analyst Recommendations

This is a summary of current recommendations and price targets for Mitsubishi UFJ Financial Group and Royal Bank of Canada, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mitsubishi UFJ Financial Group 0 0 1 0 3.00
Royal Bank of Canada 0 6 3 0 2.33

Royal Bank of Canada has a consensus price target of $100.50, indicating a potential upside of 30.32%. Given Royal Bank of Canada’s higher probable upside, analysts plainly believe Royal Bank of Canada is more favorable than Mitsubishi UFJ Financial Group.

Earnings and Valuation

This table compares Mitsubishi UFJ Financial Group and Royal Bank of Canada’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mitsubishi UFJ Financial Group $54.79 billion 1.44 $11.05 billion $0.71 8.37
Royal Bank of Canada $40.37 billion 2.75 $8.74 billion $6.06 12.73

Mitsubishi UFJ Financial Group has higher revenue and earnings than Royal Bank of Canada. Mitsubishi UFJ Financial Group is trading at a lower price-to-earnings ratio than Royal Bank of Canada, indicating that it is currently the more affordable of the two stocks.

Dividends

Mitsubishi UFJ Financial Group pays an annual dividend of $0.13 per share and has a dividend yield of 2.2%. Royal Bank of Canada pays an annual dividend of $2.86 per share and has a dividend yield of 3.7%. Mitsubishi UFJ Financial Group pays out 18.3% of its earnings in the form of a dividend. Royal Bank of Canada pays out 47.2% 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.

Profitability

This table compares Mitsubishi UFJ Financial Group and Royal Bank of Canada’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mitsubishi UFJ Financial Group 16.35% 6.56% 0.36%
Royal Bank of Canada 21.75% 17.76% 0.97%

Volatility & Risk

Mitsubishi UFJ Financial Group has a beta of 1.74, indicating that its share price is 74% more volatile than the S&P 500. Comparatively, Royal Bank of Canada has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500.

Insider & Institutional Ownership

0.9% of Mitsubishi UFJ Financial Group shares are owned by institutional investors. Comparatively, 40.4% of Royal Bank of Canada shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Royal Bank of Canada beats Mitsubishi UFJ Financial Group on 10 of the 15 factors compared between the two stocks.

About Mitsubishi UFJ Financial Group

Mitsubishi UFJ Financial Group, Inc., a bank holding company, provides financial services in Japan and internationally. Its Retail Banking Business Group segment offers banking products and services, including financial consulting services; deposit products, such as non-interest-bearing deposit accounts; asset management and administration services; trust products; and other investment products. This segment also provides annuity, single premium whole life, flat-rate premium whole life, medical, cancer, and nursing-care insurance products; testamentary trust services; housing loans; Internet banking services; and credit cards. The company's Corporate Banking Business Group segment provides loans and fund management, and remittance and foreign exchange services; derivatives, securitization, syndicated loans, and structured finance; investment banking services; and transaction and trust banking services. Its Trust Assets Business Group segment offers asset management and administration services for products, such as pension trusts and security trusts. This segment also provides a range of services to corporate and pension funds comprising pension fund management and administration, advice on pension schemes, and payment to beneficiaries. The company's Global Business Group segment offers project finance, export credit agency, and financing through asset-backed commercial papers; and investment banking services, such as debt/equity issuance and M&A advisory services, as well as consumer finance, investment, asset management, and other financial products and services to individuals, large corporations, financial institutions, and sovereign and multinational organizations. Its Global Markets Business Group segment offers financing, hedging, and investing solutions to retail, corporate, institutional, and governmental clients; and asset and liability management services. Mitsubishi UFJ Financial Group, Inc. was founded in 1880 and is headquartered in Tokyo, Japan.

About Royal Bank of Canada

Royal Bank of Canada, together with its subsidiaries, operates as a diversified financial service company worldwide. The company's Personal & Commercial Banking segment offers personal and business banking services, as well as auto financing and retail investment products. This segment also provides a suite of financial products and services to individual, business clients, and public institutions through its branch, automated teller machines, online, mobile, and telephone banking networks, as well as through sales professionals. Its Wealth Management segment offers a suite of investment, trust, banking, credit, and other wealth management solutions to high net worth and ultra-high net worth clients; and asset management products and services directly to institutional and individual clients through its distribution channels and third-party distributors. The company's Insurance segment provides life, health, home, auto, travel, wealth, group, and reinsurance products and solutions through retail insurance branches, field sales representatives, advice centers, and online network, as well as through independent insurance advisors and affinity relationships. Its Investor and Treasury Services segment offers asset services, custody, payments, and treasury services for financial and other institutional investors. This segment also provides cash management, correspondent banking, and trade finance for financial institutions; and short-term funding and liquidity management services. The company's Capital Markets segment offers corporate and investment banking, as well as equity and debt origination, distribution, and structuring and trading for public and private companies, institutional investors, governments, and central banks. Royal Bank of Canada was founded in 1864 and is headquartered in Toronto, Canada.

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