Reviewing Itau Unibanco (NYSE:ITUB) and Barclays (NYSE:BCS)

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

Earnings and Valuation

This table compares Barclays and Itau Unibanco”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Barclays	$38.42 billion	2.26	$9.46 billion	$2.29	10.99
Itau Unibanco	$30.04 billion	3.44	$8.03 billion	$0.70	13.34

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

Dividends

Barclays pays an annual dividend of $0.60 per share and has a dividend yield of 2.4%. Itau Unibanco pays an annual dividend of $0.03 per share and has a dividend yield of 0.3%. Barclays pays out 26.2% of its earnings in the form of a dividend. Itau Unibanco pays out 4.3% 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.

Volatility and Risk

Barclays has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500. Comparatively, Itau Unibanco has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Barclays and Itau Unibanco, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Barclays	0	1	4	1	3.00
Itau Unibanco	0	1	2	1	3.00

Itau Unibanco has a consensus price target of $9.00, indicating a potential downside of 3.59%. Given Itau Unibanco’s higher probable upside, analysts clearly believe Itau Unibanco is more favorable than Barclays.

Institutional and Insider Ownership

3.4% of Barclays shares are held by institutional investors. 0.0% of Barclays shares are held by company insiders. Comparatively, 0.6% of Itau Unibanco shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Barclays	21.91%	8.33%	0.40%
Itau Unibanco	20.64%	20.83%	1.55%

Summary

Barclays beats Itau Unibanco on 8 of the 15 factors compared between the two stocks.

About Barclays

Barclays PLC provides various financial services in the United Kingdom, Europe, the Americas, Africa, the Middle East, and Asia. The company operates through Barclays UK and Barclays International division segments. It offers financial services, such as retail banking, credit cards, wholesale banking, investment banking, wealth management, and investment management services. In addition, the company engages in securities dealing activities. The company was formerly known as Barclays Bank Limited and changed its name to Barclays PLC in January 1985. Barclays PLC was founded in 1690 and is headquartered in London, the United Kingdom.

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.