Contrasting Svenska Handelsbanken AB (publ) (OTCMKTS:SVNLY) & National Bankshares (NASDAQ:NKSH)

Svenska Handelsbanken AB (publ) (OTCMKTS:SVNLY) and National Bankshares (NASDAQ:NKSH) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.

Dividends

Svenska Handelsbanken AB (publ) pays an annual dividend of $0.38 per share and has a dividend yield of 8.1%. National Bankshares pays an annual dividend of $1.46 per share and has a dividend yield of 5.1%. Svenska Handelsbanken AB (publ) pays out 55.1% of its earnings in the form of a dividend. National Bankshares pays out 64.6% 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. Svenska Handelsbanken AB (publ) is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Svenska Handelsbanken AB (publ) and National Bankshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Svenska Handelsbanken AB (publ)	0	0	0	0	N/A
National Bankshares	0	1	0	0	2.00

National Bankshares has a consensus price target of $31.00, indicating a potential upside of 8.77%. Given National Bankshares’ higher possible upside, analysts clearly believe National Bankshares is more favorable than Svenska Handelsbanken AB (publ).

Institutional & Insider Ownership

29.7% of National Bankshares shares are owned by institutional investors. 2.8% of National Bankshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Svenska Handelsbanken AB (publ) has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, National Bankshares has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500.

Profitability

This table compares Svenska Handelsbanken AB (publ) and National Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Svenska Handelsbanken AB (publ)	15.61%	13.93%	0.75%
National Bankshares	19.00%	10.17%	0.81%

Earnings and Valuation

This table compares Svenska Handelsbanken AB (publ) and National Bankshares’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Svenska Handelsbanken AB (publ)	$16.45 billion	1.13	$2.74 billion	$0.69	6.80
National Bankshares	$68.19 million	2.46	$15.69 million	$2.26	12.61

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

Summary

National Bankshares beats Svenska Handelsbanken AB (publ) on 8 of the 14 factors compared between the two stocks.

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.

About National Bankshares

National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking products and services to individuals, businesses, non-profits, and local governments. The company accepts interest-bearing and non-interest-bearing demand deposit accounts, money market deposit accounts, savings accounts, certificates of deposit, health savings accounts, and individual retirement accounts. Its loan products include commercial and agricultural, commercial real estate, residential real estate, home equity, and various consumer loan products, as well as loans for the construction of commercial and residential properties. The company also provides business and consumer debit and credit cards; letters of credit, night depository services, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services; non-deposit investment and insurance products; and telephone, mobile, and Internet banking services. The company was founded in 1891 and is headquartered in Blacksburg, Virginia.