HDFC Bank (NYSE:HDB – Get Free Report) and Banco Bradesco (NYSE:BBDO – Get Free Report) are both large-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, earnings, profitability and institutional ownership.
Institutional and Insider Ownership
17.6% of HDFC Bank shares are held by institutional investors. 1.0% of HDFC Bank shares are held by insiders. Comparatively, 0.3% of Banco Bradesco shares are held by 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
This is a summary of recent ratings for HDFC Bank and Banco Bradesco, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| HDFC Bank | 1 | 2 | 1 | 0 | 2.00 |
| Banco Bradesco | 0 | 0 | 1 | 0 | 3.00 |
Risk and Volatility
HDFC Bank has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, Banco Bradesco has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500.
Earnings and Valuation
This table compares HDFC Bank and Banco Bradesco”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| HDFC Bank | $54.16 billion | 2.11 | $7.51 billion | $1.70 | 13.10 |
| Banco Bradesco | $41.79 billion | 1.00 | $4.24 billion | $0.42 | 9.37 |
HDFC Bank has higher revenue and earnings than Banco Bradesco. Banco Bradesco is trading at a lower price-to-earnings ratio than HDFC Bank, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares HDFC Bank and Banco Bradesco’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| HDFC Bank | 15.96% | 11.84% | 1.64% |
| Banco Bradesco | 10.20% | 14.61% | 1.11% |
Dividends
HDFC Bank pays an annual dividend of $0.34 per share and has a dividend yield of 1.5%. Banco Bradesco pays an annual dividend of $0.03 per share and has a dividend yield of 0.8%. HDFC Bank pays out 20.0% of its earnings in the form of a dividend. Banco Bradesco pays out 7.1% 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.
Summary
HDFC Bank beats Banco Bradesco on 12 of the 15 factors compared between the two stocks.
About HDFC Bank
HDFC Bank Limited provides banking and financial services to individuals and businesses in India, Bahrain, Hong Kong, and Dubai. The company operates in three segments: Wholesale Banking, Retail Banking, and Treasury Services. It accepts savings, salary, current, rural, public provident fund, pension, and demat accounts; fixed and recurring deposits; and safe deposit lockers, as well as offshore accounts and deposits, and overdrafts against fixed deposits. The company also provides personal, home, car, two-wheeler, business, doctor, educational, gold, consumer, and rural loans; loans against properties, securities, fixed deposits, rental receivables, and assets; loans for professionals; government sponsored programs; and loans on credit card, as well as working capital and commercial/construction equipment finance, healthcare/medical equipment and commercial vehicle finance, dealer finance, and term loans. In addition, it offers credit, debit, prepaid, and forex cards; payment and collection, export, import, remittance, bank guarantee, letter of credit, trade, hedging, and merchant and cash management services; insurance and investment products. Further, the company provides short term finance, bill discounting, structured finance, export credit, loan repayment, and documents collection services; online and wholesale, mobile, and phone banking services; unified payment interface, immediate payment, national electronic funds transfer, and real time gross settlement services; and channel financing, vendor financing, reimbursement account, money market, derivatives, employee trusts, cash surplus corporates, tax payment, and bankers to rights/public issue services, as well as financial solutions for supply chain partners and agricultural customers. It operates branches and automated teller machines in various cities/towns. The company was incorporated in 1994 and is headquartered in Mumbai, India.
About Banco Bradesco
Banco Bradesco S.A., together with its subsidiaries, provides various banking products and services to individuals, corporates, and businesses in Brazil and internationally. The company operates through two segments, Banking and Insurance. It provides current, savings, click, and salary accounts; real estate credit, vehicle financing, payroll loans, mortgage loans, microcredit, leasing, and personal and installment credit; overdraft and agribusiness loans; debit and business cards; financial and security services; consortium products; car, personal accident, dental, travel, and life insurance; investment products; pension products; foreign currency exchange services; capitalization bonds; and internet banking services. Banco Bradesco S.A. was founded in 1943 and is headquartered in Osasco, Brazil.
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