Analyzing Banco Santander Chile (NYSE:BSAC) & Hilltop (NYSE:HTH)

Banco Santander Chile (NYSE:BSAC) and Hilltop (NYSE:HTH) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.

Profitability

This table compares Banco Santander Chile and Hilltop’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banco Santander Chile	27.04%	22.94%	1.70%
Hilltop	10.17%	7.40%	1.02%

Risk & Volatility

Banco Santander Chile has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500. Comparatively, Hilltop has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Banco Santander Chile and Hilltop, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banco Santander Chile	1	4	3	1	2.44
Hilltop	0	3	1	1	2.60

Banco Santander Chile presently has a consensus target price of $35.40, suggesting a potential upside of 5.43%. Hilltop has a consensus target price of $40.00, suggesting a potential upside of 6.33%. Given Hilltop’s stronger consensus rating and higher possible upside, analysts plainly believe Hilltop is more favorable than Banco Santander Chile.

Dividends

Banco Santander Chile pays an annual dividend of $1.10 per share and has a dividend yield of 3.3%. Hilltop pays an annual dividend of $0.88 per share and has a dividend yield of 2.3%. Banco Santander Chile pays out 42.0% of its earnings in the form of a dividend. Hilltop pays out 32.6% 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. Hilltop has increased its dividend for 8 consecutive years.

Earnings & Valuation

This table compares Banco Santander Chile and Hilltop”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banco Santander Chile	$4.50 billion	3.51	$1.12 billion	$2.62	12.82
Hilltop	$1.63 billion	1.33	$165.59 million	$2.70	13.93

Banco Santander Chile has higher revenue and earnings than Hilltop. Banco Santander Chile is trading at a lower price-to-earnings ratio than Hilltop, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

6.4% of Banco Santander Chile shares are held by institutional investors. Comparatively, 57.1% of Hilltop shares are held by institutional investors. 5.4% of Hilltop shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Hilltop beats Banco Santander Chile on 9 of the 17 factors compared between the two stocks.

About Banco Santander Chile

Banco Santander-Chile, together with its subsidiaries, provides commercial and retail banking services in Chile. It operates through Retail Banking, Middle-Market, Corporate Investment Banking, and Corporate Activities segments. The company offers debit and credit cards, checking accounts, and savings products; consumer, automobile, commercial, mortgage, and government-guaranteed loans; and Chilean peso and foreign currency-denominated loans to finance various commercial transactions, trade, foreign currency forward contracts, and credit lines, as well as mortgage financing services. It also provides mutual fund management, insurance and securities brokerage, foreign exchange services, financial leasing, financial consulting and advisory, investment management, foreign trade, leasing, factoring, treasury, and transactional services, as well as specialized services to finance residential projects. In addition, the company offers short-term financing and fundraising, and brokerage services, as well as derivatives, securitization, and other products; and manages capital allocations. It serves individuals, small to middle-sized entities, companies, and large corporations, as well as universities, government entities, and local and regional governments. The company was incorporated in 1977 and is headquartered in Santiago, Chile. Banco Santander-Chile operates as a subsidiary of Banco Santander, S.A.

About Hilltop

Hilltop Holdings Inc. provides business and consumer banking services. It operates through three segments: Banking, Broker-Dealer, and Mortgage Origination. The Banking segment offers savings, checking, interest-bearing checking, and money market accounts; certificates of deposit; lines and letters of credit, home improvement and equity loans, loans for purchasing and carrying securities, term, agricultural and commercial real estate, equipment loans, and other lending products; and mortgage, commercial and industrial loans, and term and construction finance. It also provides treasury management, asset management, check cards, safe deposit boxes, online banking, bill pay, and overdraft privilege services; and estate planning, management and administration, investment portfolio management, employee benefit accounts, and individual retirement accounts services, as well as automated teller machines. The Broker-Dealer segment offers public finance services that assist public entities in originating, syndicating, and distributing securities of municipalities and political subdivisions; specialized advisory and investment banking services; advice and guidance to arbitrage rebate compliance, portfolio management, and local government investment pool administration; advisory services and products for derivatives and commodities; agricultural insurance; and sells, trades in, and underwrites U.S. government and government agency bonds, corporate bonds, and municipal bonds; mortgage-backed, asset-backed, and commercial mortgage-backed securities and structured products; and provides asset and liability management advisory, clearing, retail, and securities lending services. The Mortgage Origination segment offers fixed and adjustable rate mortgages, jumbo, new construction, Federal Housing Administration, Veterans Affairs, and United States Department of Agriculture loans. Hilltop Holdings Inc. was incorporated in 1998 and is based in Dallas, Texas.