Comparing Intercorp Financial Services (NYSE:IFS) and Peoples Financial Services (NASDAQ:PFIS)

Intercorp Financial Services (NYSE:IFS) and Peoples Financial Services (NASDAQ:PFIS) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, earnings, profitability, analyst recommendations and risk.

Dividends

Intercorp Financial Services pays an annual dividend of $1.71 per share and has a dividend yield of 3.6%. Peoples Financial Services pays an annual dividend of $2.50 per share and has a dividend yield of 3.4%. Intercorp Financial Services pays out 31.3% of its earnings in the form of a dividend. Peoples Financial Services pays out 41.4% 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. Intercorp Financial Services has raised its dividend for 1 consecutive years and Peoples Financial Services has raised its dividend for 8 consecutive years. Intercorp Financial Services is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Intercorp Financial Services and Peoples Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Intercorp Financial Services	34.81%	17.06%	2.10%
Peoples Financial Services	20.51%	11.76%	1.15%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Intercorp Financial Services and Peoples Financial Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Intercorp Financial Services	0	2	1	0	2.33
Peoples Financial Services	0	3	1	0	2.25

Intercorp Financial Services presently has a consensus target price of $62.00, indicating a potential upside of 31.55%. Peoples Financial Services has a consensus target price of $65.50, indicating a potential downside of 10.15%. Given Intercorp Financial Services’ stronger consensus rating and higher possible upside, research analysts plainly believe Intercorp Financial Services is more favorable than Peoples Financial Services.

Institutional and Insider Ownership

31.7% of Peoples Financial Services shares are owned by institutional investors. 8.2% of Peoples Financial Services shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Intercorp Financial Services and Peoples Financial Services”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Intercorp Financial Services	$1.67 billion	3.14	$542.25 million	$5.47	8.62
Peoples Financial Services	$283.67 million	2.57	$59.19 million	$6.04	12.07

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

Risk & Volatility

Intercorp Financial Services has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500. Comparatively, Peoples Financial Services has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.

Summary

Intercorp Financial Services beats Peoples Financial Services on 10 of the 16 factors compared between the two stocks.

About Intercorp Financial Services

Intercorp Financial Services Inc., together with its subsidiaries, offers banking, insurance, wealth management, and payment services for retail and commercial clients in Peru. The company provides loans, credit facilities, deposits, and current accounts; life annuity products with single-premium payment and conventional life insurance products, as well as other retail insurance products; and brokerage and investment management services. It engages in the development, management, operation, and processing of credit and debit cards; facilitation of payments and services through commercial stores; and installation and maintenance of infrastructure for transactions through electronic commerce modality and networks of payment methods processors. The company was incorporated in 1897 and is based in Lima, Peru. Intercorp Financial Services Inc. operates as a subsidiary of Intercorp Perú Ltd.

About Peoples Financial Services

Peoples Financial Services Corp. operates as the bank holding company for Peoples Security Bank and Trust Company that provides various commercial and retail banking services. The company accepts money market, negotiable order of withdrawal, savings, individual retirement, demand deposit, and certificates of deposit accounts. It also provides residential real estate, automobile, manufactured housing, personal, and home equity loans; and commercial real estate, working capital, construction, small business administration, and agricultural loans, as well as loans for equipment and other commercial needs, and mineral rights. In addition, the company offers fiduciary and investment services; investment management, IRA trustee, estate administration, living and life insurance trust, trustee under will, guardianship, custodial/IRA custodial, and corporate trust services, as well as pension and profit-sharing plans. Further, it provides wealth management products and services comprising investment portfolio management, estate and business succession planning, annuities, insurance, retirement plan, and tax planning, as well as education funding strategies; and securities, brokerage, and investor services. Additionally, the company offers small business checking and merchant money market accounts, online and telephone banking, business credit cards, merchant line of credit, and financial checkup services; and remote deposit capture, automatic clearing house transaction, cash management, automated teller machine, point of sale transaction, safe deposit box, night depository, direct deposit, and official check services. It serves business, non-profit, governmental, municipal agency, and professional customers, as well as retail customers. Peoples Financial Services Corp. was founded in 1905 and is headquartered in Scranton, Pennsylvania.