Financial Analysis: Hanover Bancorp (NASDAQ:HNVR) vs. Itaú Unibanco (NYSE:ITUB)

Itaú Unibanco (NYSE:ITUB) and Hanover Bancorp (NASDAQ:HNVR) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.

Profitability

This table compares Itaú Unibanco and Hanover Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Itaú Unibanco	11.09%	18.73%	1.44%
Hanover Bancorp	10.82%	7.62%	0.64%

Risk & Volatility

Itaú Unibanco has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500. Comparatively, Hanover Bancorp has a beta of -0.23, meaning that its share price is 123% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Itaú Unibanco and Hanover Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Itaú Unibanco	0	2	2	0	2.50
Hanover Bancorp	0	0	1	0	3.00

Itaú Unibanco presently has a consensus target price of $7.05, suggesting a potential upside of 15.10%. Hanover Bancorp has a consensus target price of $21.00, suggesting a potential upside of 20.06%. Given Hanover Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Hanover Bancorp is more favorable than Itaú Unibanco.

Earnings & Valuation

This table compares Itaú Unibanco and Hanover Bancorp’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Itaú Unibanco	$62.74 billion	0.96	$6.63 billion	$0.74	8.28
Hanover Bancorp	$113.89 million	1.11	$15.16 million	$1.96	8.92

Itaú Unibanco has higher revenue and earnings than Hanover Bancorp. Itaú Unibanco is trading at a lower price-to-earnings ratio than Hanover Bancorp, indicating that it is currently the more affordable of the two stocks.

Dividends

Itaú Unibanco pays an annual dividend of $0.03 per share and has a dividend yield of 0.5%. Hanover Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.3%. Itaú Unibanco pays out 4.1% of its earnings in the form of a dividend. Hanover Bancorp pays out 20.4% 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.

Insider and Institutional Ownership

15.0% of Hanover Bancorp shares are held by institutional investors. 0.6% of Itaú Unibanco shares are held by insiders. Comparatively, 24.8% of Hanover Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

About Itaú Unibanco

Itaú Unibanco Holding S.A. offers a range of financial products and services to individuals and corporate customers in Brazil and internationally. The company operates through three segments: Retail Banking, Wholesale Banking, and Activities with the Market + Corporation. It offers current account; loans; credit and debit cards; investment and commercial banking services; real estate lending services; financing and investment services; economic, financial and brokerage advisory; and leasing and foreign exchange services. The company also provides property and casualty insurance products covering loss, damage, or liabilities for assets or persons, as well as life insurance products covering death and personal accident. It serves retail customers, account and non-account holders, individuals and legal entities, high income clients, microenterprises, and small companies, as well as middle-market companies and high net worth clients. The company was formerly known as Itaú Unibanco Banco Múltiplo S.A. and changed its name to Itaú Unibanco Holding S.A. in April 2009. The company was incorporated in 1924 and is headquartered in São Paulo, Brazil. Itaú Unibanco Holding S.A. operates as a subsidiary of IUPAR – Itaú Unibanco Participações S.A.

About Hanover Bancorp

Hanover Bancorp, Inc., a bank holding company for Hanover Community Bank, provides personal and business lending and deposit services to businesses, municipalities, and individuals in the New York metro area. The company offers checking, credit cards, debit cards, money market, savings, government and municipal banking, and professional services, as well as time deposits, including certificate of deposit and individual retirement accounts. It also provides business loans, commercial real estate financing, small business administration, lending directory services, and residential mortgage. In addition, the company offers cash management, online and mobile banking, merchant services, and digital solutions. Its banking offices are located in Nassau, Suffolk, Queens, Kings, New York Counties, New York, Monmouth County, Freehold, and New Jersey. The company was founded in 2008 and is headquartered in Mineola, New York.