Critical Comparison: Itau Unibanco (NYSE:ITUB) versus Grupo Cibest (NYSE:CIB)

Grupo Cibest (NYSE:CIB) and Itau Unibanco (NYSE:ITUB) are both large-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Volatility & Risk

Grupo Cibest has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, Itau Unibanco has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500.

Profitability

This table compares Grupo Cibest and Itau Unibanco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Grupo Cibest	17.26%	22.58%	2.54%
Itau Unibanco	16.30%	19.60%	1.49%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Grupo Cibest and Itau Unibanco, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grupo Cibest	3	2	3	1	2.22
Itau Unibanco	0	2	3	1	2.83

Grupo Cibest currently has a consensus price target of $48.00, suggesting a potential downside of 23.37%. Itau Unibanco has a consensus price target of $7.09, suggesting a potential downside of 0.56%. Given Itau Unibanco’s stronger consensus rating and higher probable upside, analysts clearly believe Itau Unibanco is more favorable than Grupo Cibest.

Dividends

Grupo Cibest pays an annual dividend of $4.86 per share and has a dividend yield of 7.8%. Itau Unibanco pays an annual dividend of $0.03 per share and has a dividend yield of 0.4%. Grupo Cibest pays out 66.8% of its earnings in the form of a dividend. Itau Unibanco pays out 4.2% 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.

Earnings & Valuation

This table compares Grupo Cibest and Itau Unibanco”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grupo Cibest	$10.55 billion	1.43	$1.25 billion	$7.28	8.60
Itau Unibanco	$163.14 billion	0.47	$7.62 billion	$0.72	9.90

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

Summary

Grupo Cibest beats Itau Unibanco on 7 of the 13 factors compared between the two stocks.

About Grupo Cibest

Bancolombia S.A., together with its subsidiaries, provides banking products and services in Colombia and internationally. The company operates through nine segments: Banking Colombia, Banking Panama, Banking El Salvador, Banking Guatemala, Trust, Investment Banking, Brokerage, International Banking, and All Other. It offers checking and savings accounts, money market accounts, time deposits, fixed term deposits, and investment products; trade financing, loans funded by domestic development banks, working capital loans, credit cards, personal and vehicle loans, payroll loans, and overdrafts; factoring; and financial and operating leasing services. The company provides hedging instruments, including futures, forwards, options, and swaps; and brokerage, investment advisory, and private banking services comprising selling and distributing equities, futures, foreign currencies, fixed income securities, mutual funds, and structured products. In addition, it offers cash management services; foreign currency and trade finance solutions; letters of credit and bills collection; insurance and bancassurance products; telephone and mobile phone banking services; and online and computer banking services. Further, the company provides project and acquisition finance, loan syndication, corporate loans, debt and equity capital markets, principal investments, mergers and acquisition, hedging strategy advisories, restructurings, and structured financing; mutual and pension funds, private equity funds, payment and corporate trust, and custody; internet-based trading platform; inter-bank lending and repurchase agreements; managing escrow accounts, and investment and real estate funds; credit cards; roadside and medical assistance services; and transportation, maintenance and remodeling, and outsourcing services, as well as provides technology services. Bancolombia S.A. was founded in 1875 and is headquartered in Medellín, Colombia.

About Itau Unibanco

Itaú Unibanco Holding S.A. offers a range of financial products and services to individuals and corporate customers in Brazil and internationally. The company operates through three segments: Retail Banking, Wholesale Banking, and Activities with the Market + Corporation. It offers current account; loans; credit and debit cards; investment and commercial banking services; real estate lending services; financing and investment services; economic, financial and brokerage advisory; and leasing and foreign exchange services. The company also provides property and casualty insurance products covering loss, damage, or liabilities for assets or persons, as well as life insurance products covering death and personal accident. It serves retail customers, account and non-account holders, individuals and legal entities, high income clients, microenterprises, and small companies, as well as middle-market companies and high net worth clients. The company was formerly known as Itaú Unibanco Banco Múltiplo S.A. and changed its name to Itaú Unibanco Holding S.A. in April 2009. The company was incorporated in 1924 and is headquartered in São Paulo, Brazil. Itaú Unibanco Holding S.A. operates as a subsidiary of IUPAR – Itaú Unibanco Participações S.A.