Head to Head Review: Credicorp (NYSE:BAP) and Freddie Mac (OTCMKTS:FMCC)

Freddie Mac (OTCMKTS:FMCC) and Credicorp (NYSE:BAP) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, analyst recommendations, risk, valuation, institutional ownership and earnings.

Analyst Recommendations

This is a breakdown of recent recommendations for Freddie Mac and Credicorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Freddie Mac	1	2	2	1	2.50
Credicorp	0	3	4	0	2.57

Freddie Mac currently has a consensus price target of $14.90, suggesting a potential upside of 176.95%. Credicorp has a consensus price target of $418.40, suggesting a potential upside of 9.25%. Given Freddie Mac’s higher possible upside, equities research analysts clearly believe Freddie Mac is more favorable than Credicorp.

Profitability

This table compares Freddie Mac and Credicorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Freddie Mac	9.58%	-90.29%	0.37%
Credicorp	25.04%	20.52%	2.87%

Valuation and Earnings

This table compares Freddie Mac and Credicorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Freddie Mac	$129.82 billion	0.03	$10.73 billion	$0.01	538.00
Credicorp	$8.01 billion	4.51	$1.94 billion	$26.99	14.19

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

Insider & Institutional Ownership

89.8% of Credicorp shares are owned by institutional investors. 0.1% of Freddie Mac shares are owned by insiders. Comparatively, 15.9% of Credicorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Freddie Mac has a beta of 1.73, suggesting that its share price is 73% more volatile than the S&P 500. Comparatively, Credicorp has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500.

Summary

Credicorp beats Freddie Mac on 9 of the 15 factors compared between the two stocks.

About Freddie Mac

Federal Home Loan Mortgage Corporation operates in the secondary mortgage market in the United States. It operates through two segments, Single-Family and Multifamily. The Single-Family segment purchases, securitizes, and guarantees single-family loans; and manages single-family mortgage credit and market risk, as well as manages mortgage-related investments portfolio, single-family securitization activities, and treasury functions. This segment serves mortgage banking companies, commercial banks, regional banks, community banks, credit unions, housing finance agencies, savings institutions, and non-depository financial institutions. The Multifamily segment engages in the purchase, securitization, and guarantee of multifamily loans; issuance of multifamily K certificates; manages multifamily mortgage credit and market risk; and invests in multifamily loans and mortgage-related securities. It serves banks and other financial institutions, insurance companies, money managers, hedge funds, pension funds, state and local governments, and broker dealers. Federal Home Loan Mortgage Corporation incorporated in 1970 and is headquartered in McLean, Virginia.

About Credicorp

Credicorp Ltd. provides various financial, insurance, and health services and products primarily in Peru and internationally. It operates through Universal Banking, Insurance and Pensions, Microfinance, and Investment Banking and Equity Management segments. The Universal Banking segment grants various credits and financial instruments to individuals and legal entities; and various deposits and current accounts. The Insurance and Pensions segment issues insurance policies to cover losses in commercial property, transport, marine vessels, automobiles, life, health, and pensions; and management services for private pension funds. The Microfinance segment provides management of loans, deposits, and current accounts for small and microenterprises. The Investment Banking and Equity Management segment is involved in provision of brokerage and investment management services for corporations, institutional investors, governments, and foundations; structuring and placement of issues in the primary market; execution and negotiation of transactions in the secondary market; and structuring of securitization processes for corporate customers and manages mutual funds. The company was founded in 1889 and is headquartered in Lima, Peru.