Three Foreign Bank Stocks Analysts Are Keen On (ING, LYG, SMFG)
Here is a quick look three top-performing financial stocks based overseas and with a consensus recommendation of analysts of Strong Buy. They are ING Groep (NYSE: ING), Lloyds Banking (NYSE: LYG) and Sumitomo Mitsui Financial (NYSE: SMFG).
This Amsterdam-based financial services company provides banking, investments, life insurance and retirement services worldwide. ING has been shedding assets in order to repay the remaining balance from a 10 billion euro bailout back in 2008. Its market capitalization is currently near $29 billion. The long-term earnings per share (EPS) forecast is almost 19 percent and the price-to-earnings (P/E) ratio is about 10.5. But the return on equity is only about 1.5 percent. Short interest is less than one percent of the float. Thomson/First Call has only one analyst listed that follows the stock, but that analyst has rated the stock at Strong Buy for the past three months. The price target is more than 40 percent higher than the current share price, a level it has not seen since May of 2011. Over the past six months, ING has underperformed Prudential Financial (NYSE: PRU) as well as the broader markets.
Lloyds provides banking and financial services to personal and corporate customers primarily in the United Kingdom. It has a market cap of about $37 billion and it is headquartered in London. Lloyds, which also received a bailout, recently announced that it will shed some private equity assets for $1.6 billion. The long-term EPS growth forecast is about 50 percent, but the return on equity is in negative territory. The P/E ratio is higher than the industry average, but so is the operating margin. Short interest is less than one percent of the float. Both analysts who follow the stock and were surveyed recommend buying shares. Their mean price target, or where they expect the share price to go, is about 38 percent higher than the current share price, a level it has not seen since May of 2011. Over the past six months, Lloyds has outperformed troubled peer Barclays (NYSE: BCS) but underperformed Royal Bank of Scotland (NYSE: RBS).
Sumitomo Mitsui Financial
Based in Tokyo, this company provides banking and financial products and services in Japan, the Americas, Europe, the Middle East and Asia. The market cap is more than $8 billion and the dividend yield is near 3.8 percent. The P/E ratio is about 12.8, and short interest is less than one percent of the float. Here too Thomson Reuters only tracks a single analyst, which has rated the stock as Strong Buy for at least three months. This analyst believes the stock has plenty of room to run, as the price target is more than 34 percent higher than the current share price, as well as higher than the 52-week high. The share price has pulled back more than five percent in the past month but is still up almost eight percent year to date. Over the past six months, the stock has outperformed much larger Citigroup (NYSE: C) and competitor Mitsubishi UFJ Financial (NYSE: MTU).
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