Spanish stock report - Banco Santander


Banco Santander underperforms 97% of the market June 23, 2017 17:30 CEST


Banco Santander, S.A. (MA:SAN), Spain's largest Bank by market cap, has decreased 6.10c (1.0%) from its last trading session of June 22 to close at EUR5.79. Compared with the IBEX 35 Index which fell 79.1 points (0.7%) in the day, the relative price change was -0.3%. The volume was 0.5 times the average daily trading volume of 88.4 million shares. In the Spanish market of 110 stocks traded today, the stock has a 14-day relative price strength of 3 indicating it is trailing 97% of the market. A price fall combined with a low relative strength is a bearish signal.



1.1 Fundamentals:

+ The relative yield of the stock, defined by its yield of 3.6%, divided by average yield of dividend yielding stocks in the IBEX 35 Index of 3.9% is 92.8%. This suggests the stock is overvalued in dividend yield terms.

1.2 Overvaluation [compared with sector average]:

+ Dividend yield of 3.6% [4.2%].

1.3 Technicals:

+ The price decreased 1.0% in the last week and 0.8% in the last month.

+ Falls to Rises: in the past month the number of falls outnumbered rises 15:9 or 1.7:1.

1.4 Low Performance Indicators:

DescriptionValueRank In Market
Total Debt to Equity2.5In Bottom Quartile
Return on Assets [ROA] %0.6In Bottom 6%



2.1 Fundamentals:

+ The P/E of 13.8 multiplied by the P/NTA of 1.4 is 18.8. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.

+ The earnings yield of 7.3% has a spread of 5.9% vs the 10-year treasury yield of 1.4%. This is the widest and most attractive spread in the past two months.

+ Net profit margin has averaged 18.2% in the last 3 years. This is considered superior and suggests a high margin of safety.

+ Brandirectory have estimated Banco Santander brand value at EUR18 billion (US$20.1 billion). The Brand Value represents an impressive 9.7% of the estimated Enterprise Value of EUR185.3 billion (US$207.5 billion).

+ As per the Du Pont analysis, Return on Equity is less than stellar at 7.3%. This is computed as net profit margin of 25.4% times asset turnover [sales/assets] of 0.02 times leverage factor [total assets/shareholders' equity] of 14.7.

+ Revenue and Net Profit growth have shown signs of recovery in recent quarters. [Quarter ended, all figures in %]

QtrRevenue GrowthNet Profit Growth
Dec 16298.7290.6
Sep 16-71.2-41.8

2.2 Undervaluation [compared with sector average]:

+ Price/Earnings of 13.8 [18.4]. We estimate Banco Santander stock is trading at a current year P/E of 12 and a forward year P/E of 11.2.

+ Return on Equity 7.3% [5.0%].

+ Return on Assets 0.6% [0.3%].

2.3 Technicals:

+ In the last three months the stock has hit a new 52-week high nine times, pointing to a significant uptrend.

+ The present value of EUR1,000 (PV1000) invested one year ago in Banco Santander is EUR1,520, comprising a capital gain of EUR452 and dividend reinvested of EUR68.

IBEX 35 Index9889771,196

+ The present value of EUR1,000 (PV1000) invested ten years ago in Banco Santander is EUR1,260, including a capital loss of EUR160 and dividend reinvested of EUR420.

+ 10 years Multiplier in EUR = 1.26x

+ Compound Annual Growth Rate (CAGR) in EUR = 2.3%

Present Value of USD1,000 invested 10 years ago:

+ The present value of USD1,000 (PV1000) invested ten years ago in Banco Santander is $US1,053, including a capital loss of $US298 and dividend reinvested of $US351.

+ 10 years ago EUR 1 equalled USD 1.34

+ 10 years Multiplier in USD = 1.053x

+ Compound Annual Growth Rate (CAGR) in USD = 0.5%

Jun 23, 2017: EUR 1 equals USD 1.12

2.4 High Performance Indicator:

DescriptionValueRank In Market
Today's TurnoverEUR250.2 million (US$280.2 million)In Top 2%



3.1 Volatility:

+ Banco Santander is at a discount of 8.7% to its 12-month high of EUR6.35 on May 08. It is also at a premium of 94.7% to the 12-month low of EUR2.98 on June 24, 2016.

3.2 Moving Annual Return

SANClose (EUR)Dividends (EUR)Capital Gain / (Loss) %% YieldAnnual Return %
June 235.790.2145.25.250.5
1 Yr ago3.990.2(34.5)3.2(31.3)
2 Yrs ago6.090.562.99.512.4
3 Yrs ago5.920.5377.415.993.2
4 Yrs ago3.340.

3.3 Beta:

+ Beta: the Beta of Banco Santander stock is 1.6. A Beta greater than 1 suggests this is a high risk, high return stock with volatility greater than that of the market.

3.4 Aggregate Volumes, Prices and Turnover Period:

[Volume Index or VI in brackets; 1 is average]

+ Madrid: SAN.MA 43,180,448 [VI of 0.5] volume 99.91% of aggregate. Price: EUR5.79.

+ London: BNC.L 23,295 [VI of 0.002] volume 0.05% of aggregate. Price: GBX517.0. Using the current exchange rate of EUR1 equals 88.07GBX, The shares are at a 1.3% premium to the close price on Madrid.

+ Aggregate volume: there were 43.2 million shares of Banco Santander worth EUR250.5 million traded today. The aggregate volume was 0.4 times average trading of 98.3 million shares.

The turnover rate in the 12 months to date was 127.1% (or a turnover period of 9 months). This average length of ownership of the stock at 0.7 times the average holding period of 1 year 58 days for stocks in the IBEX 35 Index suggests a slightly larger number of speculators on the share register, making it less safe for long-term investors.



4.1 Global Rank [out of 47,450 stocks] and Rank in the Europe Region [out of 8,291 stocks]

DescriptionValueGlobal RankIn Eur Region
MCap (US$)94.6B8824
Total Assets (US$)1,494.6B317
Revenue (US$)34.7B385102
Net Profit (US$)7.4B9214
Return on Equity %7.316,8162,957
Net Profit Margin %25.44,337876
Price to Book1.415,2232,544
Yield %3.66,5321,161
PV$1000 (1Year) US$*1,5096,5811,091
US$* Change (1Year) %51.47,0671,191

* 1 year ago EUR 1 = USD 1.13

Jun 23, 2017: EUR 1 equals USD 1.12

4.2 Independent Ratings

Banco Santander, S.A. was ranked 10 in the Brand Finance list of the world's 500 Valuable Banking brands by brand value in 2015; a deterioration over a year from rank 8 in 2014. Brand Finance valued the brand at US$18,700 million and ranked it Number 10 in Europe. Most of the brand valuation was for services such as Retail Banking.

It was ranked 18 in SNL's list of Top 100 Banks by Total Assets in 2016; an improvement over a year from rank 20 in 2015.

It is the 64th largest by profit in the FT Global 500.

It was ranked 72 by MCap as at March 31, 2015 by PwC in the Top 100 Global companies; a deterioration over 6 years from rank 65 as at March 31, 2009.

It is the 146th largest by revenue in the Forbes Global 2000.

It was ranked 157 by Newsweek and Corporate Knights Capital in the World's 500 Greenest Companies 2016. It had outstanding scores of 11.9% in Carbon productivity, 7.7% in Energy productivity and 5.9% in Water productivity.

It is placed 29/92 in BSS News Bites' ranking of Spanish performers in the past year, a percentile ranking of 69.



5.1 Financials Summary

Year endedDec 2016Dec 2015Dec 2014
Sales (USD B)34.86445.5
Pretax (USD B)12.610.710.9
Net (USD B)
EPS (EUR)0.42140.44970.4498

5.2 Trailing 12 Months Dividends

Trailing 12 Months ToValue (c)
23 Jun 201720.94
23 Jun 201619.68
23 Jun 201556.32
23 Jun 201452.92
23 Jun 201313.25



6.1 Activities

Banco Santander SA. (the Bank) is a financial group that offers a range of financial products.

6.2 Industry & Sector

Classification LevelName of Sector
Business SectorBanking & Investment Services
Industry GroupBanking Services
Economic SectorFinancials

6.3 Issued Capital

Based on 14,582,341,000 issued shares the market capitalisation is EUR84.5 billion (US$94.6 billion).



Corporate Wire

To view Recent Company Headlines, click here

April 07: Banco Santander announces dividend

December 30 2016: Banco Santander announces dividend

October 18 2016: Banco Santander announces dividend

September 27 2016: Banco Santander appoints Independent Director

June 30 2016: Banco Santander announces dividend

Physical Address: Ciudad Grupo Santander Boadilla del Monte Madrid, 28660 Spain

State/Province/Country: Spain

Exchange: Bolsa de Madrid

ISIN: ES0113900J37


PermID: 4296154985