Financial Review: Svenska Handelsbanken AB (publ) (OTCMKTS:SVNLY) and First Commonwealth Financial (NYSE:FCF)

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

Dividends

First Commonwealth Financial pays an annual dividend of $0.52 per share and has a dividend yield of 3.3%. Svenska Handelsbanken AB (publ) pays an annual dividend of $0.37 per share and has a dividend yield of 5.8%. First Commonwealth Financial pays out 37.4% of its earnings in the form of a dividend. Svenska Handelsbanken AB (publ) pays out 56.9% 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.

Risk & Volatility

First Commonwealth Financial has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, Svenska Handelsbanken AB (publ) has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Commonwealth Financial	$478.12 million	3.38	$142.57 million	$1.39	11.42
Svenska Handelsbanken AB (publ)	$17.44 billion	1.45	$2.60 billion	$0.65	9.80

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Commonwealth Financial	20.38%	10.36%	1.22%
Svenska Handelsbanken AB (publ)	14.89%	13.62%	0.73%

Analyst Ratings

This is a summary of current ratings and recommmendations for First Commonwealth Financial and Svenska Handelsbanken AB (publ), as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Commonwealth Financial	0	3	3	0	2.50
Svenska Handelsbanken AB (publ)	1	0	0	0	1.00

First Commonwealth Financial presently has a consensus target price of $19.58, suggesting a potential upside of 23.35%. Given First Commonwealth Financial’s stronger consensus rating and higher probable upside, equities analysts plainly believe First Commonwealth Financial is more favorable than Svenska Handelsbanken AB (publ).

Institutional & Insider Ownership

72.6% of First Commonwealth Financial shares are owned by institutional investors. 2.0% of First Commonwealth Financial 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.

Summary

First Commonwealth Financial beats Svenska Handelsbanken AB (publ) on 12 of the 16 factors compared between the two stocks.

About First Commonwealth Financial

First Commonwealth Financial Corporation, a financial holding company, provides various consumer and commercial banking services in the United States. Its consumer services include personal checking accounts, interest-earning checking accounts, savings and health savings accounts, insured money market accounts, debit cards, investment certificates, fixed and variable rate certificates of deposit, mortgage loans, secured and unsecured installment loans, construction and real estate loans, safe deposit facilities, credit cards, credit lines with overdraft checking protection, IRA accounts, and automated teller machine (atm) services, as well as internet, mobile, and telephone banking services. The company's commercial banking services comprise commercial lending, business checking accounts, online account management services, payroll direct deposits, commercial cash management services, and repurchase agreements, as well as ACH origination services. In addition, it offers various trust and asset management services; auto, home, and business insurance, as well as term life insurance; and annuities, mutual funds, and stock and bond brokerage services through a broker-dealer and insurance brokers. The company was founded in 1934 and is headquartered in Indiana, Pennsylvania.

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.