Analyzing Alerus Financial (NASDAQ:ALRS) & Intercorp Financial Services (NYSE:IFS)

Alerus Financial (NASDAQ:ALRS) and Intercorp Financial Services (NYSE:IFS) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, valuation, risk, profitability, analyst recommendations, earnings and institutional ownership.

Insider and Institutional Ownership

51.3% of Alerus Financial shares are owned by institutional investors. 4.3% of Alerus Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Alerus Financial and Intercorp Financial Services”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alerus Financial	$399.92 million	1.87	$17.44 million	$1.03	28.82
Intercorp Financial Services	$1.67 billion	3.81	$542.25 million	$5.35	10.70

Intercorp Financial Services has higher revenue and earnings than Alerus Financial. Intercorp Financial Services is trading at a lower price-to-earnings ratio than Alerus Financial, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Alerus Financial and Intercorp Financial Services, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alerus Financial	0	4	1	2	2.71
Intercorp Financial Services	0	2	1	0	2.33

Alerus Financial currently has a consensus price target of $28.38, indicating a potential downside of 4.40%. Intercorp Financial Services has a consensus price target of $56.00, indicating a potential downside of 2.19%. Given Intercorp Financial Services’ higher possible upside, analysts plainly believe Intercorp Financial Services is more favorable than Alerus Financial.

Risk and Volatility

Alerus Financial has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500. Comparatively, Intercorp Financial Services has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.

Dividends

Alerus Financial pays an annual dividend of $0.84 per share and has a dividend yield of 2.8%. Intercorp Financial Services pays an annual dividend of $1.71 per share and has a dividend yield of 3.0%. Alerus Financial pays out 81.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Intercorp Financial Services pays out 32.0% of its earnings in the form of a dividend. Alerus Financial has increased its dividend for 25 consecutive years and Intercorp Financial Services has increased its dividend for 1 consecutive years. Intercorp Financial Services is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Alerus Financial and Intercorp Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alerus Financial	6.74%	14.39%	1.51%
Intercorp Financial Services	30.53%	17.49%	2.13%

Summary

Intercorp Financial Services beats Alerus Financial on 11 of the 17 factors compared between the two stocks.

About Alerus Financial

Alerus Financial Corporation operates as the bank holding company for Alerus Financial, National Association that engages in the provision of various financial services to businesses and consumers. The company operates in four segments: Banking, Mortgage, Retirement and Benefit Services, and Wealth Management. It offers various deposit products, including demand deposits, interest-bearing transaction accounts, money market accounts, time and savings deposits, checking accounts, and certificates of deposit; and treasury management products, including electronic receivables management, remote deposit capture, cash vault services, merchant services, and other cash management services. The company also provides commercial loans, business term loans, lines of credit, and commercial real estate loans, as well as construction and land development loans; consumer lending products, including residential first mortgage loans; installment loans and lines of credit; and second mortgage loans. In addition, it offers retirement plan administration and investment advisory services, employee stock ownership plan, fiduciary services, payroll, health savings accounts, and other benefit services, as well as individual retirement accounts; and financial planning, investment management, personal and corporate trust, estate administration, and custody services. Further, the company provides debit and credit cards, online banking, mobile banking/wallet, payment, private banking, payroll accounts, flex spending accounts, administration, and government health insurance program services. It offers banking services in North Dakota, Minnesota, and Arizona; and retirement and benefit plans through offices located in Michigan, Minnesota, and Colorado. The company was formerly known as First National Bank North Dakota and changed its name to Alerus Financial Corporation in 2000. Alerus Financial Corporation was founded in 1879 and is headquartered in Grand Forks, North Dakota.

About Intercorp Financial Services

Intercorp Financial Services Inc., together with its subsidiaries, offers banking, insurance, wealth management, and payment services for retail and commercial clients in Peru. The company provides loans, credit facilities, deposits, and current accounts; life annuity products with single-premium payment and conventional life insurance products, as well as other retail insurance products; and brokerage and investment management services. It engages in the development, management, operation, and processing of credit and debit cards; facilitation of payments and services through commercial stores; and installation and maintenance of infrastructure for transactions through electronic commerce modality and networks of payment methods processors. The company was incorporated in 1897 and is based in Lima, Peru. Intercorp Financial Services Inc. operates as a subsidiary of Intercorp Perú Ltd.