Contrasting Bancolombia (CIB) and Westpac Banking (WBK)

Bancolombia (NYSE:CIB) and Westpac Banking (NYSE:WBK) are both large-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, analyst recommendations, profitability, risk and earnings.

Earnings & Valuation

This table compares Bancolombia and Westpac Banking’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bancolombia $5.76 billion 1.71 $784.50 million $3.64 11.24
Westpac Banking $28.58 billion 2.25 $6.09 billion $1.75 10.82

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

Analyst Ratings

This is a summary of recent ratings and target prices for Bancolombia and Westpac Banking, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bancolombia 0 7 0 0 2.00
Westpac Banking 2 3 1 0 1.83

Bancolombia presently has a consensus target price of $43.00, suggesting a potential upside of 5.13%. Given Bancolombia’s stronger consensus rating and higher possible upside, research analysts clearly believe Bancolombia is more favorable than Westpac Banking.

Insider and Institutional Ownership

11.0% of Bancolombia shares are owned by institutional investors. Comparatively, 0.6% of Westpac Banking shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Bancolombia has a beta of 0.43, indicating that its share price is 57% less volatile than the S&P 500. Comparatively, Westpac Banking has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500.

Profitability

This table compares Bancolombia and Westpac Banking’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bancolombia 10.82% 8.17% 0.95%
Westpac Banking N/A N/A N/A

Dividends

Bancolombia pays an annual dividend of $1.35 per share and has a dividend yield of 3.3%. Westpac Banking pays an annual dividend of $1.38 per share and has a dividend yield of 7.3%. Bancolombia pays out 37.1% of its earnings in the form of a dividend. Westpac Banking pays out 78.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Bancolombia beats Westpac Banking on 9 of the 15 factors compared between the two stocks.

About Bancolombia

Bancolombia S.A. provides various banking products and services to individual, corporate, and government customers in Colombia, Latin America, and the Caribbean region. The company operates in nine segments: Banking Colombia, Banking Panama, Banking El Salvador, Banking Guatemala, Trust, Investment Banking, Brokerage, Off Shore, and All Other. It offers checking and savings accounts, 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, overdrafts, and financing for industrial projects; mortgage banking and factoring services; and financial and operating leasing services. The company also provides capital market products, including futures, forwards, options, and swaps; and brokerage, investment advisory, and private banking services, including selling and distributing equities, futures, foreign currencies, fixed income securities, mutual funds, and structured products. In addition, it offers cash management services; foreign currency transaction services; and life, auto, commercial, and homeowner's insurance products. Further, the company provides investment banking services comprising project and acquisition finance, debt and equity capital markets, principal investments, merger and acquisition, restructurings, and structured corporate lending; trust and asset management services, such as money market accounts, mutual and pension funds, private equity funds, payment trust, custody, and corporate trust; digital banking and revolving credit facility services. Additionally, it is involved in transportation, real estate brokerage, maintenance and remodeling, advertising and marketing, and outsourcing activities. The company operates 1,153 branches, 10,349 banking correspondents, and 590 mobile service spots; 227 kiosks; and 5,630 automatic teller machines. Bancolombia S.A. was founded in 1945 and is headquartered in Medellín, Colombia.

About Westpac Banking

Westpac Banking Corporation provides various banking and financial services in Australia, New Zealand, Asia, the Pacific region, and internationally. It operates through five divisions: Consumer Bank, Business Bank, BT Financial Group, Westpac Institutional Bank, and Westpac New Zealand. It offers everyday banking, savings, term deposit, moving to Australia, under 21 and student, business, community solutions one, not-for-profit savings, and foreign currency accounts; term, tailor-made, and farm management deposits; debit, credit, and travel money cards; home, personal, investment, small business, and commercial loans; and equipment, automotive, cash flow, property, and insurance premium financing services. It also provides home and content, landlord, car, travel, boat, caravan and trailer, life, credit card and loan repayment, income protection, business, farm pack, person income, and business overheads insurance products; superannuation and retirement products; investment portfolios; installment warrants; and trading, financial advisory, wealth, foreign currency exchange, international payment, cash flow management, international trade, and import and export services. In addition, it offers industry specific banking and treasury services; other services, such as emergency cash, online and telephone banking, ATMs, unclaimed money, travel center, margin lending, and banking services to migrants moving to Australia; and mobile wallets. Further, it provides capital advisory and fund management, transactional and private banking, and financial market services; and corporate and structured finance, as well as trade and supply chain finance. It serves individuals; micro, small, and medium enterprises; and commercial, corporate, institutional, and government customers. The company was formerly known as Bank of New South Wales and changed its name to Westpac Banking Corporation in October 1982. The company was founded in 1817 and is headquartered in Sydney, Australia.

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