Reviewing International Bancshares (NASDAQ:IBOC) & Banco Santander Chile (NYSE:BSAC)

Banco Santander Chile (NYSE:BSAC) and International Bancshares (NASDAQ:IBOC) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, dividends, risk, profitability and earnings.

Profitability

This table compares Banco Santander Chile and International Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banco Santander Chile	27.04%	22.94%	1.70%
International Bancshares	38.83%	12.67%	2.47%

Analyst Ratings

This is a summary of current ratings and price targets for Banco Santander Chile and International Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banco Santander Chile	1	4	3	1	2.44
International Bancshares	0	0	1	0	3.00

Banco Santander Chile presently has a consensus price target of $35.20, indicating a potential upside of 15.45%. International Bancshares has a consensus price target of $85.00, indicating a potential upside of 27.13%. Given International Bancshares’ stronger consensus rating and higher probable upside, analysts clearly believe International Bancshares is more favorable than Banco Santander Chile.

Dividends

Banco Santander Chile pays an annual dividend of $1.10 per share and has a dividend yield of 3.6%. International Bancshares pays an annual dividend of $1.46 per share and has a dividend yield of 2.2%. Banco Santander Chile pays out 42.0% of its earnings in the form of a dividend. International Bancshares pays out 22.0% 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. International Bancshares has raised its dividend for 16 consecutive years.

Volatility and Risk

Banco Santander Chile has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500. Comparatively, International Bancshares has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500.

Insider and Institutional Ownership

6.4% of Banco Santander Chile shares are owned by institutional investors. Comparatively, 65.9% of International Bancshares shares are owned by institutional investors. 13.1% of International Bancshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Banco Santander Chile and International Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banco Santander Chile	$4.50 billion	3.19	$1.12 billion	$2.62	11.64
International Bancshares	$1.06 billion	3.94	$412.29 million	$6.63	10.08

Banco Santander Chile has higher revenue and earnings than International Bancshares. International Bancshares is trading at a lower price-to-earnings ratio than Banco Santander Chile, indicating that it is currently the more affordable of the two stocks.

Summary

International Bancshares beats Banco Santander Chile on 11 of the 18 factors compared between the two stocks.

About Banco Santander Chile

Banco Santander-Chile, together with its subsidiaries, provides commercial and retail banking services in Chile. It operates through Retail Banking, Middle-Market, Corporate Investment Banking, and Corporate Activities segments. The company offers debit and credit cards, checking accounts, and savings products; consumer, automobile, commercial, mortgage, and government-guaranteed loans; and Chilean peso and foreign currency-denominated loans to finance various commercial transactions, trade, foreign currency forward contracts, and credit lines, as well as mortgage financing services. It also provides mutual fund management, insurance and securities brokerage, foreign exchange services, financial leasing, financial consulting and advisory, investment management, foreign trade, leasing, factoring, treasury, and transactional services, as well as specialized services to finance residential projects. In addition, the company offers short-term financing and fundraising, and brokerage services, as well as derivatives, securitization, and other products; and manages capital allocations. It serves individuals, small to middle-sized entities, companies, and large corporations, as well as universities, government entities, and local and regional governments. The company was incorporated in 1977 and is headquartered in Santiago, Chile. Banco Santander-Chile operates as a subsidiary of Banco Santander, S.A.

About International Bancshares

International Bancshares Corporation, a financial holding company, provides commercial and retail banking services in Texas and the State of Oklahoma. It accepts checking and saving deposits; and offers commercial, real estate, personal, home improvement, automobile, and other installment and term loans. The company also provides international banking services, including letters of credit, commercial and industrial loans, and foreign exchange services. In addition, it offers other banking related services, such as credit cards, safety deposit boxes, collection, notary public, escrow, drive up and walk up facilities, and other customary banking services; and Internet banking services, as well as securities products through third party providers. The company was founded in 1966 and is headquartered in Laredo, Texas.