Spanish stock report - Banco Santander

SPAIN

Banco Santander rises on high volatility January 19, 2018 17:30 CET

NEWS BITES - EUROPE

Banco Santander, S.A. (MA:SAN), Spain's largest Bank by market cap, traded between an intraday low of EUR5.89 and a high of EUR5.97, suggesting a trading opportunity between peaks and troughs. The average daily volatility of 2.1% places the stock in the 3rd quartile in the market, meaning it is the mildly volatile. The stock price has increased 2.80c (0.5%) from its last trading session of January 18 to close at EUR5.93. Compared with the IBEX 35 Index which rose 46.8 points (0.5%) in the day, the relative price increase was 0.02%. The volume was 0.7 times the average daily trading volume of 81.3 million shares.

Highlights in today's Report:

SECTION 1 BULLISH SIGNALS

Fundamentals, Undervaluation [compared with sector average], Technicals, High Performance Indicators, A positive finish to 2017

SECTION 2 BEARISH SIGNALS

Fundamentals, Technicals, Low Performance Indicators, Moving Annual Return, Beta, Aggregate Volumes, Prices and Turnover Period

SECTION 3 RANKING

Global, Independent Ratings

SECTION 4 FINANCIALS

Financials Summary, Annual Report for the year ended December 31, 2016 (year-on-year comparisons with previous corresponding period)-, Trailing 12 Months Dividends

SECTION 5 PROFILE

Activities, Industry & Sector, Issued Capital

SECTION 6 STOCK BUZZ

SECTION 1 BANCO SANTANDER BULLISH SIGNALS

1.1 Fundamentals:

+ The P/E of 14.4 multiplied by the P/NTA of 1.6 is 22.3. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.

+ 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 EUR16.4 billion (US$20.1 billion). The Brand Value represents an impressive 8.4% of the estimated Enterprise Value of EUR195.9 billion (US$240.2 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.

1.2 Undervaluation [compared with sector average]:

+ Return on Assets 0.6% [0.5%].

1.3 Technicals:

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 5.81 minus the 26-day EMA of 5.71 is positive 0.1 suggesting a bullish signal.

+ The 2.7% discount to 12-month high of EUR6.09 against the 26.4% premium to 12-month low of EUR4.69 suggests the stock continues to push for new highs.

+ The present value of EUR1,000 (PV1000) invested one year ago in Banco Santander is EUR1,287, comprising a capital gain of EUR238 and dividend reinvested of EUR48.

PV10001-week1-month1-year
SAN.MA1,0451,287
IBEX 35 Index1,0031,0381,117

+ The present value of EUR1,000 (PV1000) invested ten years ago in Banco Santander is EUR1,354, including a capital loss of EUR30 and dividend reinvested of EUR384.

+ 10 years Multiplier in EUR = 1.354x

+ Compound Annual Growth Rate (CAGR) in EUR = 3.1%

Present Value of USD1,000 invested 10 years ago:

+ The present value of USD1,000 (PV1000) invested ten years ago in Banco Santander is $US1,133, including a capital loss of $US189 and dividend reinvested of $US321.

+ 10 years ago EUR 1 equalled USD 1.4661

+ 10 years Multiplier in USD = 1.133x

+ Compound Annual Growth Rate (CAGR) in USD = 1.2%

Jan 19, 2018: EUR 1 equals USD 1.23

1.4 High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverEUR339.2 million (US$415.9 million)In Top 2%
EBITDA Margin %36.3In Top Quartile
Price/MAP501.05In Top Quartile

1.5 A positive finish to 2017

The stock has soared EUR1.0 (or 35.6%) over the past two years, after rising 15.7% in FY2016 and 17.2% in FY2017 to close at EUR5.47.

SECTION 2 BANCO SANTANDER BEARISH SIGNALS

2.1 Fundamentals:

+ The relative yield of the stock, defined by its yield of 3.5%, divided by average yield of dividend yielding stocks in the IBEX 35 Index of 3.8% is 91.7%. This suggests the stock is overvalued in dividend yield terms.

2.2 Technicals:

Overbought/Bearish/Resistance Signals:

+ The Relative Strength Index (RSI) of 82.9 has penetrated the overbought line of 70, suggesting the price gain of 8.8% in the last 14 days is unusually high.

+ The stock is overbought according to the Williams % R indicator of -9.4, suggesting the price is close to its 14-day high of EUR5.98.

2.3 Low Performance Indicators:

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

2.4 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 4 of the last 5 years. An investment a year ago in SAN would have produced a return of 28.2%.

SANClose (EUR)Dividends (EUR)Capital Gain / (Loss) %% YieldAnnual Return %
Jan 195.930.2123.84.428.2
1 Yr ago4.790.2375.642.6
2 Yrs ago3.50.24(29.5)4.9(24.6)
3 Yrs ago4.960.556.711.718.5
4 Yrs ago4.650.3912.19.521.6

Close 5 years ago EUR4.14

2.5 Beta:

+ Beta: the Beta of Banco Santander stock is 1.4. A Beta greater than 1 suggests this is a high risk, high return stock with volatility greater than that of the market.

2.6 Aggregate Volumes, Prices and Turnover Period:

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

+ Madrid: SAN.MA 57,204,606 [VI of 0.7] volume 77.66% of aggregate. Price: EUR5.93.

+ London: BNC.L 16,370,239 [VI of 1.0] volume 22.22% of aggregate. Price: GBX520.10. Using the current exchange rate of EUR1 equals 88.14GBX, The shares are at a 0.5% discount to the close price on Madrid.

+ Aggregate volume: there were 73.6 million shares of Banco Santander worth EUR436.3 million traded today. The aggregate volume was 0.8 times average trading of 97.2 million shares.

The turnover rate in the 12 months to date was 120.4% (or a turnover period of 9 months). This average length of ownership of the stock at 0.6 times the average holding period of 1 year 3 months 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.

SECTION 3 RANKING

3.1 Global Rank [out of 47,420 stocks] and Rank in the Europe Region [out of 8,522 stocks]

DescriptionValueGlobal RankIn Eur Region
MCap (US$)116.6B8519
Total Assets (US$)1,632.2B328
Revenue (US$)37.9B341106
Net Profit (US$)8.1B9213
Return on Equity %7.317,6183,122
Net Profit Margin %25.44,456884
Price to Book1.515,7712,518
Price/Earnings14.37,5651,517
Yield %3.57,0051,365
PV$1000 (1Year) US$*1,47510,1782,246
US$* Change (1Year) %41.310,7552,334

* 1 year ago EUR 1 = USD 1.07

Jan 19, 2018: EUR 1 equals USD 1.23

3.2 Independent Ratings

+ S&P Global Market Intelligence 100:

Banco Santander, S.A. 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.

+ PwC 100:

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.

+ FT 500:

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

+ Fortune 500:

It was ranked 73 by total revenues in the Fortune 500 annual list for 2017; an improvement over a year from rank 75 in 2016.

+ Newsweek 500:

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.

+ Brand Finance 500:

It 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.

+ Forbes 2000:

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

+ BSS/News Bites:

It is placed 40/95 in BSS News Bites' ranking of Spanish performers in the past year, a percentile ranking of 58.

+ Vanguard Total World Stock ETF 7457:

The stock was one of 7457 global stocks selected by Vanguard Total World Stock ETF (VT). As at November 30, 2017, the Vanguard Total World Stock ETF held 3,932,964 shares worth $US26,251,972 or 0.19% by value of the ETF's portfolio [Ranked 68 out of 7457 by value and 1 out of 60 for Spain].

SECTION 4 BANCO SANTANDER FINANCIALS

4.1 Financials Summary

Year endedDec 2016Dec 2015Dec 2014
Sales (USD B)37.568.949
Pretax (USD B)13.611.511.7
Net (USD B)87.27
EPS (EUR)0.41160.43920.4393

Net profit was up 11% from US$7.2 billion in 2015 to US$8 billion in 2016. Earnings Per Share (EPS) was down 6.3% from 43.92c to 41.16c.

4.2 Annual Report for the year ended December 31, 2016 (year-on-year comparisons with previous corresponding period)-

Favourable Changes:

+ Net profit up 11% from EUR6.0b ($US6.5b) to EUR6.6b ($US7.0b)

+ EBIT to total assets up 18.3 from 0.7% to 0.8%.

+ Return on Equity up from 6.8% to 7.3%.

+ Retained earnings to total assets up 94% to 7.5%.

+ Net tangible assets per share up 5% from EUR4.03 ($US4.4) to EUR4.23 ($US4.5).

Unfavourable Changes:

+ EPS down 6.7% from 45.0c (US49.61c) to 42.0c (US44.45c).

+ Deposits down 2.1% to EUR829.1b ($US874.5b).

4.3 Trailing 12 Months Dividends

Trailing 12 Months ToValue (c)
19 Jan 201820.88
19 Jan 201719.69
19 Jan 201624.26
19 Jan 201554.55
19 Jan 201439.38

SECTION 5 BANCO SANTANDER PROFILE

5.1 Activities

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

5.2 Industry & Sector

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

5.3 Issued Capital

Based on 16,040,573,000 issued shares the market capitalisation is EUR95.1 billion (US$116.6 billion).

SECTION 6 STOCK BUZZ

Corporate Wire

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January 16: Banco Santander announces dividend

Banco Santander today announced an interim dividend of 6.0c per share. The ex dividend date is Tuesday, January 30, 2018 and it is payable on Thursday, February 01.

October 18 2017: Banco Santander announces dividend

Banco Santander today announced an interim dividend of 4.0c per share. The ex dividend date is Wednesday, October 18, 2017 and it is payable on Friday, November 03.

July 03 2017: Banco Santander announces dividend

Banco Santander today announced an interim dividend of 6.0c per share. The ex dividend date is Wednesday, August 02, 2017 and the record date is Thursday, August 03, 2017 and it is payable on Friday, August 04.

July 03 2017: Banco Santander announces Right Issue

The company has announced a 10 for 1 rights issue effective Thursday, July 06. To subscribe to new shares the price has been fixed at EUR4.85.

April 07 2017: Banco Santander announces dividend

Banco Santander today announced a final dividend of 5.50c per share. The ex dividend date is Thursday, April 27, 2017 and the record date is Friday, April 28, 2017 and it is payable on Tuesday, May 02.

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

State/Province/Country: Spain

Exchange: Bolsa de Madrid

ISIN: ES0113900J37

MA:SAN; MCE:SAN; MC:SAN; SM:SAN; SAN.MC

PermID: 4296154985

Source: www.BuySellSignals.com