Contrasting City (NASDAQ:CHCO) & Svenska Handelsbanken AB (publ) (OTCMKTS:SVNLY)

Svenska Handelsbanken AB (publ) (OTCMKTS:SVNLY) and City (NASDAQ:CHCO) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, valuation, dividends and analyst recommendations.

Dividends

Svenska Handelsbanken AB (publ) pays an annual dividend of $0.38 per share and has a dividend yield of 7.4%. City pays an annual dividend of $3.16 per share and has a dividend yield of 2.4%. Svenska Handelsbanken AB (publ) pays out 57.6% of its earnings in the form of a dividend. City pays out 40.6% 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.

Volatility and Risk

Svenska Handelsbanken AB (publ) has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500. Comparatively, City has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500.

Profitability

This table compares Svenska Handelsbanken AB (publ) and City’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Svenska Handelsbanken AB (publ)	14.66%	13.65%	0.73%
City	31.18%	16.60%	1.83%

Valuation & Earnings

This table compares Svenska Handelsbanken AB (publ) and City”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Svenska Handelsbanken AB (publ)	$16.45 billion	N/A	$2.74 billion	$0.66	7.79
City	$341.89 million	5.65	$114.36 million	$7.79	16.86

Svenska Handelsbanken AB (publ) has higher revenue and earnings than City. Svenska Handelsbanken AB (publ) is trading at a lower price-to-earnings ratio than City, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Svenska Handelsbanken AB (publ) and City, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Svenska Handelsbanken AB (publ)	1	0	0	0	1.00
City	0	4	0	0	2.00

City has a consensus target price of $114.25, indicating a potential downside of 13.00%. Given City’s stronger consensus rating and higher probable upside, analysts clearly believe City is more favorable than Svenska Handelsbanken AB (publ).

Insider and Institutional Ownership

72.4% of City shares are held by institutional investors. 2.5% of City shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

City beats Svenska Handelsbanken AB (publ) on 10 of the 14 factors compared between the two stocks.

About Svenska Handelsbanken AB (publ)

Svenska Handelsbanken AB (publ) provides various banking products and services for private and corporate customers primarily in Sweden, the United Kingdom, Norway, the Netherlands, the United States, Luxembourg, Finland, and Poland. The company offers savings, transactions, business, currency, and investment accounts, as well as accounts for cash pool, and forestry and agriculture; mortgage and committed loans, and private loans; mutual funds; pension products; credit and debit cards; and payment and reconciliation services, as well as foreign exchange rate services. It also provides financing for investments, such as equipment, cars, computers, and other inventories, as well as vehicle and real estate financing services; green loans and advisor services; investment and other financing services; medical care, and group and health insurance products; forestry and farming banking products; and online and mobile banking services, as well as various banking services for children and young people. In addition, the company offers financial services, that includes asset management, transactional banking, corporate finance, financing, markets, trade finance, market information and research services to large corporations; cash management solutions; and various corporate banking services to small and medium-sized companies and large corporates, as well as private banking services. Svenska Handelsbanken AB (publ) was incorporated in 1871 and is headquartered in Stockholm, Sweden.

About City

City Holding Company operates as a holding company for City National Bank of West Virginia that provides various banking, trust, and investment management, and other financial solutions in the United States. The company offers checking, savings, and money market accounts, as well as certificates of deposit and individual retirement accounts. It also provides commercial and industrial loans that consist of loans to corporate and other legal entity borrowers primarily in small to mid-size industrial and commercial companies; commercial real estate loans comprising commercial mortgages, which are secured by nonresidential and multi-family residential properties; residential real estate loans to consumers for the purchase or refinance of residence; first-priority home equity loans; home equity lines of credit; amortized home equity loans; consumer loans that are secured and unsecured by automobiles, boats, recreational vehicles, certificates of deposit, and other personal property; and demand deposit account overdrafts, as well as owner-occupied real estate and construction, land development, and lines of credit. In addition, the company offers mortgage banking services, including fixed and adjustable-rate mortgages, construction financing, land loans, production of conventional and government-insured mortgages, secondary marketing, and mortgage servicing. Further, it provides deposit services for commercial customers comprising treasury management, lockbox, and other cash management services; merchant credit card services; wealth management, trust, investment, and custodial services for commercial and individual customers; and corporate trust and institutional custody, financial and estate planning, and retirement plan services, as well as automated-teller-machine, interactive-teller-machine, mobile banking, interactive voice response systems, and credit and debit card services. City Holding Company was founded in 1957 and is headquartered in Charleston, West Virginia.