Critical Review: Deutsche Bank Aktiengesellschaft (NYSE:DB) & HDFC Bank (NYSE:HDB)

Deutsche Bank Aktiengesellschaft (NYSE:DB) and HDFC Bank (NYSE:HDB) are both large-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, analyst recommendations, profitability, dividends and valuation.

Risk & Volatility

Deutsche Bank Aktiengesellschaft has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500. Comparatively, HDFC Bank has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Deutsche Bank Aktiengesellschaft and HDFC Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Deutsche Bank Aktiengesellschaft	0	6	4	0	2.40
HDFC Bank	2	0	0	0	1.00

Deutsche Bank Aktiengesellschaft currently has a consensus price target of $43.00, indicating a potential upside of 15.65%. Given Deutsche Bank Aktiengesellschaft’s stronger consensus rating and higher probable upside, research analysts plainly believe Deutsche Bank Aktiengesellschaft is more favorable than HDFC Bank.

Insider & Institutional Ownership

27.9% of Deutsche Bank Aktiengesellschaft shares are held by institutional investors. Comparatively, 17.6% of HDFC Bank shares are held by institutional investors. 1.0% of HDFC Bank shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Deutsche Bank Aktiengesellschaft and HDFC Bank”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Deutsche Bank Aktiengesellschaft	$68.84 billion	1.05	$7.47 billion	$3.63	10.24
HDFC Bank	$54.16 billion	2.56	$8.59 billion	$1.67	16.27

HDFC Bank has lower revenue, but higher earnings than Deutsche Bank Aktiengesellschaft. Deutsche Bank Aktiengesellschaft 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 Deutsche Bank Aktiengesellschaft and HDFC Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Deutsche Bank Aktiengesellschaft	10.43%	7.69%	0.44%
HDFC Bank	15.30%	12.96%	1.63%

About Deutsche Bank Aktiengesellschaft

Deutsche Bank Aktiengesellschaft, a stock corporation, provides corporate and investment banking, and asset management products and services to private individuals, corporate entities, and institutional clients in Germany, the United Kingdom, rest of Europe, the Middle East, Africa, the Americas, and the Asia-Pacific. It operates through Corporate Bank, Investment Bank, Private Bank, and Asset Management segments. The Corporate Bank segment offers cash management, trade finance and lending, trust and agency, and securities services, as well as risk management solutions. The Investment Bank segment provides debt origination, merger and acquisitions, foreign exchange, and equity advisory and origination platform services. The Private Bank segment offers payment and account services, and credit and deposit products, as well as investment advice products, such as environmental, social, and governance products. This segment also provides banking, wealth management, other financial, and postal and parcel services; and supports in planning, managing and investing wealth, financing personal and business interests, and servicing institutional and corporate needs. The Asset Management segment offers investment solutions, such as alternative investments, which include real estate, infrastructure, liquid real assets, and sustainable investments; and various other services, including insurance and pension solutions, asset liability management, portfolio management solutions, and asset allocation advisory to individuals and institutions. Deutsche Bank Aktiengesellschaft was founded in 1870 and is headquartered in Frankfurt am Main, Germany.

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.