Royal Bank Of Canada (NYSE:RY) vs. Raiffeisen Bank International (OTCMKTS:RAIFY) Financial Analysis

Raiffeisen Bank International (OTCMKTS:RAIFY) and Royal Bank Of Canada (NYSE:RY) are both large-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Institutional and Insider Ownership

45.3% of Royal Bank Of Canada shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Raiffeisen Bank International has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500. Comparatively, Royal Bank Of Canada has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500.

Profitability

This table compares Raiffeisen Bank International and Royal Bank Of Canada’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Raiffeisen Bank International	-0.56%	2.89%	0.30%
Royal Bank Of Canada	14.03%	16.12%	0.89%

Earnings & Valuation

This table compares Raiffeisen Bank International and Royal Bank Of Canada”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Raiffeisen Bank International	$15.33 billion	0.90	$1.25 billion	$0.71	14.76
Royal Bank Of Canada	$64.40 billion	3.36	$11.92 billion	$9.47	16.34

Royal Bank Of Canada has higher revenue and earnings than Raiffeisen Bank International. Raiffeisen Bank International is trading at a lower price-to-earnings ratio than Royal Bank Of Canada, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for Raiffeisen Bank International and Royal Bank Of Canada, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Raiffeisen Bank International	0	1	0	0	2.00
Royal Bank Of Canada	0	7	8	0	2.53

Royal Bank Of Canada has a consensus target price of $177.50, suggesting a potential upside of 14.74%. Given Royal Bank Of Canada’s stronger consensus rating and higher probable upside, analysts plainly believe Royal Bank Of Canada is more favorable than Raiffeisen Bank International.

Dividends

Raiffeisen Bank International pays an annual dividend of $0.18 per share and has a dividend yield of 1.7%. Royal Bank Of Canada pays an annual dividend of $4.42 per share and has a dividend yield of 2.9%. Raiffeisen Bank International pays out 25.4% of its earnings in the form of a dividend. Royal Bank Of Canada pays out 46.7% 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. Royal Bank Of Canada has increased its dividend for 15 consecutive years. Royal Bank Of Canada is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Royal Bank Of Canada beats Raiffeisen Bank International on 14 of the 16 factors compared between the two stocks.

About Raiffeisen Bank International

Raiffeisen Bank International AG, together with its subsidiaries, offers banking services to corporate, private customers, and institutional customers. The company offers cash management, cross border accounts, electronic banking, payments solutions, sustainable and subsidized financing, leveraged and acquisition financing, project and structured financing, real estate financing, leasing, factoring, trade and export financing, investment banking, investing, hedging, and investor services to its institutional clients and corporate customers in agri food and beverage, automotive, construction and building materials, food and beverage, healthcare and pharmaceuticals, oil and gas, packaging, real estate, retail, technology, telecom, and utilities industries. It also provides retail and private banking services, including deposits, loans, wealth management, and advisory services to retail customers and small and medium-sized enterprises. In addition, the company offers clearing, reporting, settlement, guarantees, letters of credit, fund administration, acceptances, brokerage, asset management, and custody services; and investment banking services, including asset based finance, fund finance and alternatives investments, loan syndication, mergers and acquisitions advisory, and debt and equity capital markets services. It operates through a network of business outlets in Central, Southeastern, and Eastern Europe, as well as Austria, Czech Republic, Hungary, Poland, and Slovakia. Raiffeisen Bank International AG was founded in 1886 and is based in Vienna, Austria.

About Royal Bank Of Canada

Royal Bank of Canada operates as a diversified financial service company worldwide. The company's Personal & Commercial Banking segment offers checking and savings accounts, home equity financing, personal lending, private banking, indirect lending, including auto financing, mutual funds and self-directed brokerage accounts, guaranteed investment certificates, credit cards, and payment products and solutions; and lending, leasing, deposit, investment, foreign exchange, cash management, auto dealer financing, trade products, and services to small and medium-sized commercial businesses. This segment offers financial products and services through branches, automated teller machines, and mobile sales network. Its Wealth Management segment provides a suite of wealth, investment, trust, banking, credit, and other advice-based solutions and strategies to high net worth and ultra-high net worth individuals, and institutional clients; asset management products to institutional and individual clients; and asset and investor services to financial institutions, asset managers, and asset owners. The company's Insurance segment offers life, health, home, auto, travel, wealth, annuities, property and casualty, and reinsurance advice and solutions; and business insurance services to individual, business, and group clients through its advice centers, RBC insurance stores, and mobile advisors; digital platforms; and independent brokers and partners. The company's Capital Markets segment offers advisory and origination, sales and trading, lending and financing, and transaction banking services to corporations, institutional clients, asset managers, private equity firms, and governments. The company was founded in 1864 and is headquartered in Toronto, Canada.