Shinhan Financial Group (NYSE:SHG) & BOK Financial (NASDAQ:BOKF) Critical Comparison

BOK Financial (NASDAQ:BOKF) and Shinhan Financial Group (NYSE:SHG) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and target prices for BOK Financial and Shinhan Financial Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BOK Financial	0	9	1	0	2.10
Shinhan Financial Group	0	0	1	0	3.00

BOK Financial presently has a consensus target price of $97.10, suggesting a potential upside of 7.15%. Given BOK Financial’s higher possible upside, research analysts plainly believe BOK Financial is more favorable than Shinhan Financial Group.

Dividends

BOK Financial pays an annual dividend of $2.20 per share and has a dividend yield of 2.4%. Shinhan Financial Group pays an annual dividend of $1.22 per share and has a dividend yield of 3.5%. BOK Financial pays out 32.1% of its earnings in the form of a dividend. Shinhan Financial Group pays out 20.1% 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. BOK Financial has raised its dividend for 19 consecutive years. Shinhan Financial Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

34.4% of BOK Financial shares are owned by institutional investors. Comparatively, 7.8% of Shinhan Financial Group shares are owned by institutional investors. 56.9% of BOK Financial shares are owned by company insiders. Comparatively, 1.0% of Shinhan Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares BOK Financial and Shinhan Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BOK Financial	13.93%	10.52%	1.06%
Shinhan Financial Group	12.76%	7.23%	0.59%

Volatility and Risk

BOK Financial has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, Shinhan Financial Group has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500.

Earnings and Valuation

This table compares BOK Financial and Shinhan Financial Group’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BOK Financial	$1.90 billion	3.08	$530.75 million	$6.86	13.21
Shinhan Financial Group	$19,600.25 billion	0.00	$3.49 billion	$6.07	5.67

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

Summary

BOK Financial beats Shinhan Financial Group on 11 of the 16 factors compared between the two stocks.

About BOK Financial

BOK Financial Corporation operates as the financial holding company for BOKF, NA that provides various financial products and services in Oklahoma, Texas, New Mexico, Northwest Arkansas, Colorado, Arizona, and Kansas/Missouri. It operates through three segments: Commercial Banking, Consumer Banking, and Wealth Management. The Commercial Banking segment offers lending, treasury, cash management, and customer commodity risk management products for small businesses, middle market, and larger commercial customers, as well as operates TransFund electronic funds transfer network. The Consumer Banking segment engages in the provision of retail lending and deposit services to small business customers through retail branch network; and mortgage loan origination and servicing activities. The Wealth Management segment offers fiduciary, private bank, insurance, and investment advisory services; and brokerage and trading services primarily related to providing liquidity to the mortgage markets through trading of U.S. government agency mortgage-backed securities and related derivative contracts, as well as underwrites state and municipal securities. The company also provides commercial loans, such as loans for working capital, facilities acquisition or expansion, purchases of equipment, and other needs of commercial customers; and service, healthcare, manufacturing, wholesale/retail, energy, and other sector loans. In addition, it offers commercial real estate loans for the construction of buildings or other improvements to real estate and property held by borrowers for investment purposes; residential mortgage and personal loans; and automated teller machine, call center, and Internet and mobile banking services. The company was founded in 1910 and is headquartered in Tulsa, Oklahoma.

About Shinhan Financial Group

Shinhan Financial Group Co., Ltd. provides financial products and services in South Korea and internationally. The company operates through six segments: Banking, Credit Card, Securities, Insurance, Credit, and Others. It offers retail banking services, including demand, savings, and fixed deposit-taking; checking accounts; mortgage and home equity, and retail lending; electronic banking and automatic teller machines (ATM); and bill paying, payroll and check-cashing, currency exchange, and wire fund transfer services. The company also provides corporate banking services, such as investment banking, real estate financing, overseas real estate and development project financing, infrastructure and structured financing, equity/venture investments, mergers and acquisitions consulting; securitization and derivatives services comprising securities and derivative products, and foreign exchange trading; business expansion financing and consulting services; and working capital loans and facilities loans. In addition, it is involved in treasury and investment activities in international capital markets consisting of foreign currency-denominated securities trading, foreign exchange trading and services, trade-related financial services, international factoring services, and foreign banking operations. Further, the company offers real estate trust, investment advisory, venture business investment, life and non-life insurance, trust account management, securities brokerage, and asset management services, as well as leasing and equipment financing, savings banking, loan collection and credit reporting, collective investment administration, private equity investment, and financial system development services. Additionally, it provides transaction history inquiries and fund transfers, opening letters of credit, trade finance, payment and collection management, sales and acquisition settlement, business-to-business settlement, sweeping, pooling, ERP interface, host-to-host banking, SWIFT SCORE, and cash and liquidity management service. Shinhan Financial Group Co., Ltd. was founded in 1982 and is headquartered in Seoul, South Korea.