Spanish stock report - Banco Santander

SPAIN

Banco Santander keeps sliding, down 5% in 3 days May 25, 2018 17:30 CEST

NEWS BITES - EUROPE

Banco Santander, S.A. (MA:SAN), Spain's largest Bank by market cap, extended its slide on Friday, shedding an additional 13.60c (2.7%) to close at EUR4.99. Banco Santander's stock have sunk 26.80c (5.1%) over the past three trading days, compared with the IBEX 35 Index which fell 312.3 points (3.1%) in the three days for a relative price change of -2.0%. Cumulative volume in the 3 days was 0.8 times the average 3-day volume of 77 million shares.

YEAR-TO-DATE

Banco Santander tumbles 6% in 2018, lagging Bank sector

Banco Santander, S.A. (MA:SAN), tumbled 34.45c (or 6.5%) year-to-date (YTD) in 2018 to close at EUR4.99. Compared with the IBEX 35 Index which has fallen 2.2% YTD, this is a relative price change of -4.3%. Revenue slumped at a disappointing 20.1% year-on-year. EPS slumped at a disappointing 58.7% year-on-year.

Highlights in today's Report:

SECTION 1 BEARISH SIGNALS

Fundamentals, Technicals, Low Performance Indicators

SECTION 2 BULLISH SIGNALS

Fundamentals, Undervaluation [compared with sector average], Technicals, Oversold/Bullish/Support Signals, High Performance Indicators

SECTION 3 PRICE VOLUME DYNAMICS

Present Value of EUR1000 invested in the past, Moving Annual Return, Beta & Alpha, Aggregate Volumes, Prices and Turnover Period

SECTION 4 RANKING

Global, Independent Ratings

SECTION 5 FINANCIALS

Financials Summary, Trailing 12 Months Dividends

SECTION 6 PROFILE

Activities, Industry & Sector, Issued Capital

SECTION 7 STOCK BUZZ

SECTION 1 BANCO SANTANDER BEARISH SIGNALS

1.1 SAN Fundamentals:

+ Total Liabilities/EBITDA of 99.6 which compares unfavourably with the Joseph Piotroski benchmark of 5.

+ As per the Du Pont analysis, Return on Equity is less than stellar at 8.0%. This is computed as net profit margin of 26.1% times asset turnover [sales/assets] of 0.02 times leverage factor [total assets/shareholders' equity] of 15.3.

1.2 SAN Technicals:

Downtrend: The stock dropped 3% on high volatility today.

+ The price tumbled 6.1% in the last month.

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 5.25 minus the 26-day EMA of 5.31 is negative 0.06 suggesting a bearish signal. Both EMA prices are falling, another bearish signal.

+ The present value of EUR1,000 (PV1000) invested one year ago in Banco Santander is EUR939, comprising a capital loss of EUR98 and dividend reinvested of EUR36.

PV10001-week1-month1-year
SAN.MA959949939
IBEX 35 Index972973898

1.3 SAN Low Performance Indicators:

DescriptionSAN ValueRank In Market
Return on Assets [ROA] %0.6In Bottom 9%
Return on Capital Employed [ROCE] %2.8In Bottom 9%
Price Change %-2.7In Bottom Quartile
Total Debt to Equity2.3In Bottom Quartile
Volatility %5.2In Bottom Quartile

SECTION 2 BANCO SANTANDER BULLISH SIGNALS

2.1 SAN Fundamentals:

+ The P/E of 12.5 multiplied by the P/NTA of 0.9 is 11.0. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.

+ The earnings yield of 8.0% has a spread of 6.6% vs the 10-year treasury yield of 1.4%. This is the widest and most attractive spread in the past two months.

+ The relative yield of SAN, defined by its yield of 4.4%, divided by average yield of dividend yielding stocks in the IBEX 35 Index of 3.6% is 121.9%. This suggests Banco Santander stock is undervalued in dividend yield terms.

+ Net profit margin has averaged 17.5% in the last 3 years. This is considered superior and suggests a high margin of safety.

+ Brandirectory have estimated Banco Santander's brand value at EUR17.2 billion (US$20.1 billion). The Brand Value represents an impressive 14.1% of the estimated Enterprise Value of EUR121.6 billion (US$142.4 billion).

2.2 SAN Undervaluation [compared with sector average]:

+ Return on Assets 0.6% [0.5%].

+ Dividend yield of 4.4% [3.5%].

2.3 SAN Technicals:

+ The 1.9% premium to 12-month low of EUR4.90 against the 16.8% discount to high of EUR6.0 suggests the decline might be bottoming.

2.4 SAN Oversold/Bullish/Support Signals:

+ At EUR4.99 the price is below the lower Bollinger band support of EUR5.05, indicating an upside for it to return to the band.

+ The Stochastic indicator of 12.0 has pierced the oversold line of 20; this indicates the price is close to its 14-day low and is likely to revert to an uptrend.

2.5 SAN High Performance Indicators:

DescriptionSAN ValueRank In Market
Today's TurnoverEUR460.5 million (US$539.1 million)In Top 2%
P/E * P/NTA10.98In Top Quartile
EBITDA Margin %39.5In Top Quartile

SECTION 3 BANCO SANTANDER PRICE VOLUME DYNAMICS

3.1 Present Value of EUR1000 invested in the past:

+ The present value of EUR1,000 (PV1000) invested ten years ago in Banco Santander is EUR1,090, including a capital loss of EUR241 and dividend reinvested of EUR331.

+ 10 years Multiplier in EUR = 1.09x

+ Compound Annual Growth Rate (CAGR) in EUR = 0.9%

May 25, 2018: EUR 1 equals USD 1.17

3.2 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 3 out of 5 years.

SANClose (EUR)Dividends (EUR)Capital Gain / (Loss) %% YieldAnnual Return %
May 254.990.22(9.8)4(5.8)
1 Yr ago5.530.2148.85.654.4
2 Yrs ago3.720.2(34.8)3.4(31.4)
3 Yrs ago5.70.569.110.719.8
4 Yrs ago5.230.5356.115.771.8

Close 5 years ago EUR3.35

3.3 Beta & Alpha:

+ Beta: the Beta of Banco Santander stock is 1.1. A Beta greater than 1 suggests this is a high risk, high return stock with volatility greater than that of the market.

+ Alpha: the Alpha of the stock is 3.9. The actual return of -3.44% exceeded the expected return of -7.3%, reflecting outperformance.

3.4 Aggregate Volumes, Prices and Turnover Period:

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

+ Madrid: SAN.MA 92,287,584 [VI of 1.2] volume 96.48% of aggregate. Price: EUR4.99.

+ London: BNC.L 3,089,708 [VI of 0.1] volume 3.23% of aggregate. Price: GBX449.35. Using the current exchange rate of EUR1 equals 87.57GBX, The shares are at a 2.8% premium to the close price on Madrid.

+ Lisbon: SANT.LS 118,530 [VI of 2.3] volume 0.12% of aggregate. Price: EUR4.98.

+ Xetra: BSD2.ETR 77,908 [VI of 1.3] volume 0.08% of aggregate. Price: EUR5.13.

+ Mexican: SAN.BMV 59,070 [VI of 1.5] volume 0.06% of aggregate. Price: MXN118.80. Using the current exchange rate of EUR1 equals 22.93MXN, The shares are at a 3.8% premium to the close price on Madrid.

+ Aggregate volume: there were 95.6 million shares of Banco Santander worth EUR477.8 million traded today. The aggregate volume equalled average trading of 98.3 million shares.

The turnover rate in the 12 months to date was 133.3% (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 44 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.

SECTION 4 BANCO SANTANDER RANKING

4.1 Global Rank [out of 47,758 stocks] and Rank in the Europe Region [out of 8,576 stocks]

DescriptionValueGlobal RankIn Eur Region
MCap (US$)94.3B10721
Total Assets (US$)1,649.2B306
Revenue (US$)38.3B333106
Net Profit (US$)8.2B9616
Return on Equity %7.317,7503,137
Net Profit Margin %25.44,455882
Price to Book1.415,5152,397
Price/Earnings12.96,6881,279
Yield %4.06,4231,190
PV$1000 (1Year) US$*98021,8063,004
US$* Change (1Year) %11.517,2103,879

* 1 year ago EUR 1 = USD 1.12

May 25, 2018: EUR 1 equals USD 1.17

4.2 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 70/101 in BSS News Bites' ranking of Spanish performers in the past year, a percentile ranking of 31.

+ Vanguard Total World Stock ETF 7517:

The stock was one of 7517 global stocks selected by Vanguard Total World Stock ETF (VT) who bought 268,962 shares in the period Nov 30, 2017 to Jan 31, 2018 worth $US1,603,336 at an estimated Volume Weighted Average Price (VWAP) of $US5.9612. As at Jan 31, 2018, the Vanguard Total World Stock ETF held 4,201,926 shares worth $US31,128,799 or 0.19% by value of the ETF's portfolio [Ranked 66 out of 7517 by value and 1 out of 63 for Spain].

SECTION 5 BANCO SANTANDER FINANCIALS

5.1 Financials Summary

Year endedDec 2017Dec 2016Dec 2015
Sales (USD B)40.565.167.5
Pretax (USD B)1612.711.3
Net (USD B)7.87.37
EPS (EUR)0.40.41020.4392

Net profit was up 6.7% from US$7.3 billion in 2016 to US$7.8 billion in 2017. Earnings Per Share (EPS) was down 2.5% from 41.02c to 40.0c.

5.2 Trailing 12 Months Dividends

Trailing 12 Months ToValue (c)
25 May 201821.96
25 May 201720.79
25 May 201619.54
25 May 201555.92
25 May 201452.55

SECTION 6 BANCO SANTANDER PROFILE

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
IndustryBanks
Economic SectorFinancials

6.3 Issued Capital

Based on 16,136,154,000 issued shares the market capitalisation is EUR80.5 billion (US$94.3 billion).

SECTION 7 BANCO SANTANDER STOCK BUZZ

Corporate Wire

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April 27: Banco Santander announces dividend

Banco Santander today announced a final dividend of 6.0c per share. The ex dividend date is Friday, April 27, 2018 and it is payable on Wednesday, May 02.

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.

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: 8589934205

RIC: SAN.MC

Source: www.BuySellSignals.com