Critical Investigation: ING Groep (NYSE: ING) vs. Intercorp Financial Services (NYSE: IFS)


ING Groep (NYSE: ING – Get Rating) and Intercorp Financial Services (NYSE: IFS – Get Rating) are both finance companies, but which is the best investment? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, valuation and risk.

Risk and Volatility

ING Groep has a beta of 1.85, suggesting its stock price is 85% more volatile than the S&P 500. In comparison, Intercorp Financial Services has a beta of 1.34, suggesting its stock price is 34 % more volatile than the S&P 500.

Profitability

This table compares the net margins, return on equity and return on assets of ING Groep and Intercorp Financial Services.

Net margins Return on equity return on assets
ING Group 25.83% 8.68% 0.49%
Intercorp Financial Services 38.19% 18.88% 1.95%

Institutional and Insider Ownership

3.8% of ING Groep shares are held by institutional investors. By comparison, 8.7% of Intercorp Financial Services’ shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds, and large money managers believe a company is poised for long-term growth.

Dividends

ING Groep pays an annual dividend of $0.77 per share and has a dividend yield of 8.2%. Intercorp Financial Services pays an annual dividend of $1.66 per share and has a dividend yield of 6.1%. ING Groep distributes 52.4% of its profits as a dividend. Intercorp Financial Services pays 41.2% of its profits as a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. Intercorp Financial Services has increased its dividend for 1 consecutive year.

Benefits and evaluation

This table compares gross revenue, earnings per share and valuation of ING Groep and Intercorp Financial Services.

Gross revenue Price/sales ratio Net revenue Earnings per share Price/earnings ratio
ING Group $21.88 billion 1.67 $7.04 billion $1.47 6.35
Intercorp Financial Services $1.08 billion 2.92 $461.14 million $4.03 6.78

ING Groep has higher revenues and profits than Intercorp Financial Services. ING Groep trades at a lower price-to-earnings ratio than Intercorp Financial Services, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and price targets for ING Groep and Intercorp Financial Services, as reported by MarketBeat.

Sales Ratings Hold odds Buy reviews Strong buy odds Rating
ING Group 0 6 5 0 2.45
Intercorp Financial Services 0 4 1 0 2.20

ING Groep currently has a consensus price target of $13.20, indicating a potential upside of 41.33%. Intercorp Financial Services has a consensus price target of $31.50, indicating a potential upside of 15.26%. Given ING Groep’s stronger consensus rating and higher possible upside, analysts clearly believe that ING Groep is more favorable than Intercorp Financial Services.

Summary

Intercorp Financial Services beats ING Groep on 9 of the 16 factors compared between the two stocks.

About ING Group (Get a rating)

ING Groep NV, a financial institution, offers various banking products and services in the Netherlands, Belgium, Germany, Poland, the rest of Europe, North America, Latin America, Asia and Australia . It operates in six segments: Retail Netherlands, Retail Belgium, Retail Germany, Retail Other, Wholesale Banking and Corporate Line Banking. The company accepts various deposits, such as checking accounts and savings accounts; and offers business lending products, as well as consumer lending products, such as residential mortgages, term loans, and revolver and personal loans. It also provides debt capital market, working capital, export finance, day-to-day banking, treasury and risk, and corporate finance solutions; and specialty lending, equity markets, finance, payments and cash management, and business services and solutions, as well as savings, investment, insurance, mortgage and digital banking services. The company serves customers, businesses and financial institutions, including small and medium-sized businesses and medium-sized businesses. ING Groep NV was founded in 1762 and is headquartered in Amsterdam, the Netherlands.

About Intercorp Financial Services (Get a rating)

Intercorp Financial Services Inc. provides banking, insurance and wealth management services to retail and business clients in Peru. The Company operates through three segments: Banking, Insurance and Wealth Management. It provides transactional accounts, such as cuenta sueldo and cuenta simple; savings accounts; investment accounts; and term deposits, certificates of deposit and compensation for time-of-service accounts. The Company also offers retail banking products, including credit cards, payroll loans, mortgages and consumer loans, as well as cash, student and secured cash loans. In addition, the Company provides corporate, medium and small business banking services; and commercial banking products, which include commercial real estate, vehicles, machinery and other assets, cash management, trade finance and electronic factoring products. In addition, it offers treasury and institutional banking services, as well as securitization services. In addition, the company offers annuities and conventional life insurance, as well as other retail insurance products, as well as financial advisory services for equities, fixed income, structured products, investments alternatives and managed accounts; brokerage and investment management services. As of December 31, 2021, it operated 189 financial stores and 1,581 ATMs. Intercorp Financial Services Inc. was incorporated in 1897 and is based in Lima, Peru. Intercorp Financial Services Inc. is a subsidiary of Intercorp Perú Ltd.



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