Mitsubishi UFJ Financial Group (NYSE:MUFG – Get Free Report) and Shinhan Financial Group (NYSE:SHG – Get Free Report) are both large-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.
Profitability
This table compares Mitsubishi UFJ Financial Group and Shinhan Financial Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Mitsubishi UFJ Financial Group | 13.87% | 9.58% | 0.50% |
| Shinhan Financial Group | 19.89% | 10.87% | 0.85% |
Institutional & Insider Ownership
13.6% of Mitsubishi UFJ Financial Group shares are owned by institutional investors. Comparatively, 7.8% of Shinhan Financial Group shares are owned by institutional investors. 0.0% of Mitsubishi UFJ Financial Group shares are owned by company insiders. Comparatively, 1.0% of Shinhan Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Mitsubishi UFJ Financial Group | 0 | 1 | 1 | 1 | 3.00 |
| Shinhan Financial Group | 0 | 0 | 1 | 1 | 3.50 |
Risk and Volatility
Mitsubishi UFJ Financial Group has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500. Comparatively, Shinhan Financial Group has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.
Valuation and Earnings
This table compares Mitsubishi UFJ Financial Group and Shinhan Financial Group”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Mitsubishi UFJ Financial Group | $89.51 billion | 2.42 | $8.36 billion | $1.14 | 16.00 |
| Shinhan Financial Group | $22,050.19 billion | 0.00 | $3.48 billion | $9.01 | 7.53 |
Mitsubishi UFJ Financial Group has higher earnings, but lower revenue than Shinhan Financial Group. Shinhan Financial Group is trading at a lower price-to-earnings ratio than Mitsubishi UFJ Financial Group, indicating that it is currently the more affordable of the two stocks.
Dividends
Mitsubishi UFJ Financial Group pays an annual dividend of $0.38 per share and has a dividend yield of 2.1%. Shinhan Financial Group pays an annual dividend of $1.86 per share and has a dividend yield of 2.7%. Mitsubishi UFJ Financial Group pays out 33.3% of its earnings in the form of a dividend. Shinhan Financial Group pays out 20.6% 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. Shinhan Financial Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Shinhan Financial Group beats Mitsubishi UFJ Financial Group on 10 of the 14 factors compared between the two stocks.
About Mitsubishi UFJ Financial Group
Mitsubishi UFJ Financial Group, Inc. operates as the bank holding company, that engages in a range of financial businesses in Japan, the United States, Europe, Asia/Oceania, and internationally. It operates through seven segments: Digital Service, Retail & Commercial Banking, Japanese Corporate & Investment Banking, Global Commercial Banking, Asset Management & Investor Services, Global Corporate & Investment Banking, and Global Markets. The company offers commercial banking, trust banking, and securities products and services to retail, and small and medium-sized enterprise customers. It also provides mergers and acquisition, debt and equity issuance, financial advice, and real estate-related services; digital-based financial services; credit cards; and trust banking and securities products and services, as well as engages in the lending, fund settlement, and foreign exchange businesses. In addition, the company offers corporate banking services, such as project export credit agency finance, and financing through asset-backed commercial paper; investment and transaction banking services for corporations, financial institutions, sovereign and multinational organizations, and institutional investors; and asset management and investor services, including pension fund management and administration, pension structure advisory, beneficiary payment, and investment trust services for retail customers. Further, it provides loans, deposits, fund transfers, hedging, and investments services for retail, small and medium-sized enterprise, as well as corporate customers; financing for automotive and consumer goods; sells and trades in fixed income instruments, currencies, equities, and equities; offers investment products comprising mutual funds, structured bonds, and notes; originates and distributes of financial products; and provides insurance and treasury services. The company was founded in 1880 and is headquartered in Tokyo, Japan.
About Shinhan Financial Group
Shinhan Financial Group Co., Ltd. provides financial products and services in South Korea and internationally. The company operates through six segments: Banking, Credit Card, Securities, Insurance, Credit, and Others. It offers retail banking services, including demand, savings, and fixed deposit-taking; checking accounts; mortgage and home equity, and retail lending; electronic banking and automatic teller machines (ATM); and bill paying, payroll and check-cashing, currency exchange, and wire fund transfer services. The company also provides corporate banking services, such as investment banking, real estate financing, overseas real estate and development project financing, infrastructure and structured financing, equity/venture investments, mergers and acquisitions consulting; securitization and derivatives services comprising securities and derivative products, and foreign exchange trading; business expansion financing and consulting services; and working capital loans and facilities loans. In addition, it is involved in treasury and investment activities in international capital markets consisting of foreign currency-denominated securities trading, foreign exchange trading and services, trade-related financial services, international factoring services, and foreign banking operations. Further, the company offers real estate trust, investment advisory, venture business investment, life and non-life insurance, trust account management, securities brokerage, and asset management services, as well as leasing and equipment financing, savings banking, loan collection and credit reporting, collective investment administration, private equity investment, and financial system development services. Additionally, it provides transaction history inquiries and fund transfers, opening letters of credit, trade finance, payment and collection management, sales and acquisition settlement, business-to-business settlement, sweeping, pooling, ERP interface, host-to-host banking, SWIFT SCORE, and cash and liquidity management service. Shinhan Financial Group Co., Ltd. was founded in 1982 and is headquartered in Seoul, South Korea.
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