KBC Grp NV/ADR (KBCSY) and Lloyds Banking Group (LYG) Critical Survey

KBC Grp NV/ADR (NYSE: LYG) and Lloyds Banking Group (NYSE:LYG) are both large-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Analyst Recommendations

This is a summary of current ratings for KBC Grp NV/ADR and Lloyds Banking Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KBC Grp NV/ADR 0 0 0 0 N/A
Lloyds Banking Group 2 4 5 0 2.27

Volatility & Risk

KBC Grp NV/ADR has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500. Comparatively, Lloyds Banking Group has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Profitability

This table compares KBC Grp NV/ADR and Lloyds Banking Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KBC Grp NV/ADR 24.35% 13.02% 0.82%
Lloyds Banking Group 15.05% 15.62% 0.93%

Dividends

KBC Grp NV/ADR pays an annual dividend of $1.61 per share and has a dividend yield of 4.4%. Lloyds Banking Group pays an annual dividend of $0.11 per share and has a dividend yield of 3.5%. KBC Grp NV/ADR pays out 47.2% of its earnings in the form of a dividend. Lloyds Banking Group pays out 20.0% 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. Lloyds Banking Group has increased its dividend for 2 consecutive years.

Earnings and Valuation

This table compares KBC Grp NV/ADR and Lloyds Banking Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
KBC Grp NV/ADR $11.20 billion 2.75 $2.91 billion $3.41 10.78
Lloyds Banking Group $50.67 billion 1.13 $4.91 billion $0.55 5.76

Lloyds Banking Group has higher revenue and earnings than KBC Grp NV/ADR. Lloyds Banking Group is trading at a lower price-to-earnings ratio than KBC Grp NV/ADR, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

0.1% of KBC Grp NV/ADR shares are held by institutional investors. Comparatively, 2.6% of Lloyds Banking Group shares are held by institutional investors. 0.0% of Lloyds Banking Group shares are held by company insiders. 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.

Summary

Lloyds Banking Group beats KBC Grp NV/ADR on 10 of the 15 factors compared between the two stocks.

About KBC Grp NV/ADR

KBC Group NV, together with its subsidiaries, provides integrated bank-insurance services primarily for retail, private banking, small and medium sized enterprises, and mid-cap clients primarily in Belgium, Bulgaria, the Czech Republic, Hungary, Ireland, and Slovakia. It accepts deposits; offers loans to individuals, businesses, and public authorities; and provides services, including payments, cash management, trade finance, leasing, corporate finance, and money and capital market products, as well as offers asset management services. KBC Group NV serves customers through a network of approximately 1,521 bank branches, as well as through insurance distribution networks and electronic channels. The company was formerly known as KBC Bank and Insurance Holding Company NV and changed its name to KBC Group NV in March 2005. KBC Group NV was incorporated in 1935 and is headquartered in Brussels, Belgium.

About Lloyds Banking Group

Lloyds Banking Group plc provides banking and financial services under the Lloyds Bank, Halifax, Bank of Scotland, and Scottish Widows brands in the United Kingdom and internationally. The company operates through three segments: Retail, Commercial Banking, and Insurance and Wealth. The Retail segment offers a range of financial service products, including current accounts, savings accounts, mortgages, motor finance, and unsecured consumer lending products to personal and small business customers. The Commercial Banking segment provides lending, transactional banking, working capital management, risk management, term lending, and debt capital markets services for small and medium sized enterprises, corporates, mid-markets, and financial institutions. The Insurance and Wealth segment offers insurance products, such as life, home, motor, and protection insurance; investments comprising pensions and investment products; and wealth management products and services. It also provides credit cards, and personal and business loans; and online and telephone banking services. Lloyds Banking Group plc was founded in 1695 and is headquartered in London, the United Kingdom.

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