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Yahoo
13 hours ago
- Business
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This is Why Banco Santander (SAN) is a Great Dividend Stock
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus. While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns. Banco Santander (SAN) is headquartered in Madrid, and is in the Finance sector. The stock has seen a price change of 76.32% since the start of the year. The financial holding company is paying out a dividend of $0.09 per share at the moment, with a dividend yield of 2.25% compared to the Banks - Foreign industry's yield of 3.7% and the S&P 500's yield of 1.53%. Looking at dividend growth, the company's current annualized dividend of $0.18 is up 20% from last year. Over the last 5 years, Banco Santander has increased its dividend 4 times on a year-over-year basis for an average annual increase of 17.90%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Banco Santander's current payout ratio is 18%. This means it paid out 18% of its trailing 12-month EPS as dividend. Earnings growth looks solid for SAN for this fiscal year. The Zacks Consensus Estimate for 2025 is $0.96 per share, which represents a year-over-year growth rate of 15.66%. From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. But, not every company offers a quarterly payout. For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, SAN is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Banco Santander, S.A. (SAN) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-05-2025
- Business
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HSBC vs. SAN: Which Global Bank Deserves a Spot in Your Portfolio?
HSBC Holdings plc HSBC and Banco Santander S.A. SAN are two of Europe's leading multinational banks, with an extensive global footprint. While HSBC is intensifying its pivot toward Asia (seeking to capitalize on the region's faster economic growth), SAN is reinforcing its position in its core markets across Europe and the Americas, with primary focus on retail and commercial banking. The key question is: Can HSBC's Asia-focused growth strategy outperform Santander's Europe and Americas-centric approach? To find out which stock presents the better investment opportunity, let's examine the underlying factors driving each bank's performance. London-based HSBC is doubling down on its Asia-focused strategy as the core of its long-term growth plan. It aims to become a leading wealth manager for high-net-worth and ultra-high-net-worth clients in Asia, which now accounts for more than half of its operations. In mainland China, HSBC is rapidly expanding its wealth business by launching integrated lifestyle-based wealth centers in key cities, acquiring Citigroup's retail wealth portfolio, investing in digital capabilities and hiring talent to strengthen its Premier Banking, Private Banking and Asset Management India, HSBC is aggressively scaling its presence. The bank received approval from the Reserve Bank of India to open 20 new branches, significantly expanding beyond its current footprint of 26 branches in 14 cities. With India's ultra-high-net-worth population projected to surge 50% by 2028, HSBC is positioning itself to capture this growth through its Global Private Banking platform (launched in 2023), the acquisition of L&T Investment Management (2022) and ongoing enhancements to its Premier Banking Asia, HSBC is taking steps to streamline and refocus its global operations. In early 2025, it announced a $1.5 billion cost-saving plan tied to organizational simplification, with estimated upfront charges of $1.8 billion by 2026. The bank is redeploying another $1.5 billion from underperforming or non-core areas into strategic part of its global restructuring, HSBC has exited or divested operations in the United States, Canada, Argentina, Russia, Greece, New Zealand, Armenia and retail banking in France and Mauritius. It is also winding down certain investment banking activities in the U.K., Europe and the United States, and reviewing its operations in markets like Germany, South Africa, Bahrain and Malta to sharpen its focus and improve revenue generation at HSBC has been subdued over the past several quarters. While the interest rate environment across the world improved, the financial impact of the challenging macroeconomic backdrop continues to weigh on the company's top-line growth. Not-so-impressive loan demand and a tough macroeconomic environment in many of its markets are concerning. Santander, one of Spain's largest lenders, is actively streamlining operations and reallocating resources to strengthen its presence in high-growth markets across Europe and the Americas. In May 2025, it announced the sale of a 49% stake in its Polish banking unit, part of a broader effort to focus on more profitable markets. Following this transaction, Santander expects its CET1 capital ratio to temporarily exceed its 12–13% target, with plans to reinvest strategically and maintain financial €3.2 billion in capital released from the sale will be returned to shareholders through share buybacks, supporting Santander's €10 billion buyback target for 2025–2026. The redeployment of capital is also expected to be earnings-accretive by 2027–2028, driving growth via a mix of organic expansion, acquisitions and continued shareholder returns. This approach will enhance the bank's flexibility to scale in key regions, including Western Europe and the the United States, Santander plans to close around 20 retail branches—5% of its network—by August 2025, aligning with a growing customer shift to digital banking. This supports the rapid expansion of Openbank, SAN's digital banking platform. Openbank, originally launched in 2017, is now Europe's largest fully digital bank by deposits and operates in several countries, including Spain, Germany and these initiatives is the One Transformation program, launched in 2014, to drive digitalization, operational efficiency and customer-centric growth. The program has unified the operating model for Retail and Commercial Banking, reduced costs and improved service delivery. These efforts have kept Santander on track to hit its 2025 targets, including €62 billion in revenues and solid growth in fee income. The Zacks Consensus Estimate for HSBC's 2025 and 2026 earnings indicates 5.1% and 3% growth, respectively. Over the past month, earnings estimates for 2025 have moved north, while for 2026, it has been revised lower. Earnings Trend Image Source: Zacks Investment Research On the contrary, analysts are more optimistic about SAN's prospects. The consensus mark for 2025 and 2026 earnings suggests an increase of 15.7% and 7%, respectively. Also, over the past 30 days, earnings estimates for 2025 and 2026 have been revised upward. Earnings Trend Image Source: Zacks Investment Research This year, Santander's shares have performed extremely well on the bourses compared with HSBC. The SAN stock has soared 76.6% on the NYSE, while HSBC gained 19.6%. Further, the industry has rallied 23.2% in the same time frame. YTD Price Performance Image Source: Zacks Investment Research Valuation-wise, HSBC is currently trading at a 12-month trailing price/tangible book (P/TB) of 1.06X, higher than its five-year median of 0.75X. The SAN stock, on the other hand, is currently trading at a 12-month trailing P/TB of 1.36X, which is higher than its five-year median of 0.71X. Further, both are trading at a discount to the industry average of 2.29X. P/TB TTM Image Source: Zacks Investment Research Thus, HSBC is inexpensive compared to HSBC's return on equity (ROE) of 12.55% is slightly above SAN's 12.26%. This reflects HSBC's efficient use of shareholder funds to generate profits. ROE Image Source: Zacks Investment Research Santander appears to be the better investment opportunity, given its stronger near-term earnings outlook and superior stock performance. The company's strategic capital redeployment and digital transformation via Openbank provide strong catalysts for sustained profitability. Furthermore, its year-to-date stock rally demonstrates solid investor confidence relative to HSBC's modest HSBC's pivot to Asia and high-net-worth wealth management could yield significant long-term gains, especially as India and China's affluent classes expand. Its disciplined global exit strategy and cost-saving plan may improve returns. Yet, muted revenue growth and weak earnings performance raise near-term concerns. While HSBC trades at a more attractive valuation and has a slightly better ROE, Santander's higher growth momentum and aggressive capital return strategy make it the better bet present, HSBC and SAN carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Banco Santander, S.A. (SAN) : Free Stock Analysis Report HSBC Holdings plc (HSBC) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
13-05-2025
- Business
- Yahoo
SAN's Business Restructuring Initiatives Driving Growth: Time to Buy?
One of the largest Spanish lenders, Banco Santander, S.A. SAN, is undertaking several steps to streamline operations and pivot toward high-growth markets in Europe and the Americas. In sync with this, on May 5, the company announced the sale of approximately 49% stake in its Polish banking business, Santander Bank Polska S.A., to Austrian bank Erste Group for €6.8 billion ($7.7 billion).In addition, Erste Group will acquire 50% of Santander Polska's asset management business (TFI), which is not currently owned by the bank, for €0.2 billion. This brings the total consideration to €7 billion. The transaction, expected to close by the year-end, is projected to result in a €2 billion net capital gain for SAN. Following the completion, Banco Santander will retain around 13% of Santander Polska and intends to fully acquire Santander Consumer Bank Polska by purchasing the remaining 60% stake from Santander Polska before closure, SAN will temporarily operate with a CET1 ratio above its 12–13% target, with plans to return to this range by strategically deploying capital to drive profitable organic growth and investments that enhance earnings, returns and shareholder value. The bank will distribute 50% of the capital released—around €3.2 billion—via share buybacks, accelerating progress toward its €10 billion buyback target for 2025–2026. Further, the transaction is expected to be accretive to SAN's earnings by 2027-2028, with re-deployed capital supporting further growth through share buybacks, organic expansion and strategic acquisitions. This will enhance its flexibility to invest across existing markets in Europe and the Americas. Financial Impact of the Transaction Image Source: Banco Santander, S.A. Since the announcement of the above-mentioned transaction, shares of Banco Santander have risen 3.6% on the NYSE. Expansion of Digital Bank: Per a recent filing with the Office of the Comptroller of the Currency, Banco Santander plans to close approximately 20 U.S. branches—around 5% of its U.S. retail network—by August, as part of its strategy to streamline operations and respond to the growing shift toward digital banking. This move aligns with the rapid growth of its U.S.-based digital platform, Openbank, which has already surpassed $2 billion in deposits since its launch in October 2024. Originally relaunched in 2017, Openbank has grown to become Europe's largest fully digital bank by deposit volume, operating across Spain, Germany, Portugal, the Netherlands, the United States and Mexico. Representing SAN's broader commitment to innovation, Openbank leverages advanced technologies such as AI-powered financial tools and a Roboadvisor platform, offering customers a seamless and intelligent approach to saving and Transformation Program: Launched in 2014, the One Transformation program focuses on digital transformation, operational efficiency and customer experience. As such, SAN created a common operating and business model for Retail and Commercial Banking segments, which continues to boost productivity, cut service costs and empower it to improve customer by the One Transformation program, Banco Santander kicked off 2025 in a strong fashion, with its first-quarter 2025 net profit of €3.4 billion marking a fourth straight quarterly record. The company posted 19% year-over-year growth in net profit on revenues of €15.5 billion, which rose 5% in constant currency terms. One Transformation Execution Image Source: Banco Santander, S.A. Additionally, SAN is on track to achieve its 2025 targets, including almost €62 billion of revenue and mid-high single-digit growth in net fee income in constant euros. 2025 Targets Image Source: Banco Santander, S.A. The Zacks Consensus Estimate for Banco Santander's 2025 revenues suggests a 3.6% decline on a year-over-year basis because of a challenging operating backdrop. On the other hand, 2026 revenues are expected to grow 3.4%. Further, the consensus estimate for earnings indicates a 12.1% and 12.2% increase for 2025 and 2026, respectively. Earnings estimates for both years have been revised upward over the past 30 days. SAN's Earnings Trend Image Source: Zacks Investment Research Banco Santander's shares have performed extremely well on the bourses this year. The stock has soared 62.3% so far this year compared with the industry's rally of 16.1%. Also, it has outperformed its peers, Barclays BCS and HSBC Holdings HSBC, in the same time frame. SAN YTD Price Performance Image Source: Zacks Investment Research Now, let's take a look at the value SAN offers investors at current present, Banco Santander is trading at 1.25X 12-month trailing price/tangible book (P/TB), below its five-year median of 0.71X. Meanwhile, the industry has P/TB TTM of 2.18X. Hence, the stock looks inexpensive compared with the industry average. SAN P/TB TTM Image Source: Zacks Investment Research Further, Barclays has a P/TB TTM of 0.70X and HSBC's P/TB TTM is 1.02X. So, Banco Santander is trading at a premium compared with Barclays and HSBC. SAN's efforts to restructure its business to improve operating efficiency through the One Transformation program and digital expansion plan are projected to drive growth. Yet, a tough operating backdrop because of global macroeconomic headwinds and not-so-impressive loan demand is likely to act as a spoilsport to some extent. Nonetheless, bullish analyst sentiments and inexpensive valuation make Banco Santander stock a lucrative bet for SAN carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Barclays PLC (BCS) : Free Stock Analysis Report Banco Santander, S.A. (SAN) : Free Stock Analysis Report HSBC Holdings plc (HSBC) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
10-05-2025
- Business
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Santander dismissed NatWest offer for U.K. retail bank, FT reports
Earlier this year, Spanish lender Santander (SAN) spurned a bid worth roughly GBP 11B for its U.K. retail bank from NatWest Group (NWG), the Financial Times reports. Santander rejected the offer because it believed the price was too low, the report says, adding that the bank has since raised EUR7B from the sale of its Polish stake as it pivots from Europe to the Americas. Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter. Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox. Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>> See the top stocks recommended by analysts >> Read More on SAN: Disclaimer & DisclosureReport an Issue Banco Santander US Reports Record Q1 2025 Profit Banco Santander US: Record Profits Amid Global Challenges SAN Earnings this Week: How Will it Perform? Banco Santander price target lowered to 720 GBp from 750 GBp at Barclays Santander exploring options for $8B stake in Polish bank unit, Bloomberg says Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
02-05-2025
- Business
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Why Banco Santander, S.A. (SAN) Is Surging in 2025
We recently published an article titled . In this article, we are going to take a look at where Banco Santander, S.A. (NYSE:SAN) stands against the other financial services stocks. The financial services sector has entered 2025 on a wave of strong performance and renewed investor interest. This sector consists of banking, payments, insurance, and asset management and is a cornerstone of the global economy. These stocks didn't do too well during the 2022 downturn, as there was uncertainty regarding whether or not the Federal Reserve would bail out regional banks. However, after the 'mini banking crisis' calmed down, these stocks have performed quite well despite the macro trends being uncertain. And for some stocks, that momentum has been even stronger so far this year. It's worth looking at why. Even during bear markets, there are pockets of the market that perform exceptionally well. For example, I identified in another article. For this article, I screened the best-performing financial services stocks year-to-date. I will also mention the number of hedge fund investors in these stocks. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). A view of a large corporate office building, illuminated at night to show its power and reach. Number of Hedge Fund Holders In Q4 2024: 17 Banco Santander, S.A. (NYSE:SAN) is a global retail and commercial bank headquartered in Spain, serving 175 million customers across Europe and the Americas. The stock's strong performance in 2025 is primarily due to record first-quarter results, with attributable profit rising 19% to €3.4 billion and earnings per share up 26%. This surge was driven by record net fee income, lower costs, and continued growth in customer numbers, as well as a favorable comparison to the previous year's temporary Spanish banking levy, which was much lower in 2025. The bank reaffirmed its 2025 targets. This included a return on tangible equity above 15.8% and robust shareholder returns, which have included substantial share buybacks and cash dividends. A major catalyst was the February 2025 announcement of a €10 billion share buyback plan, which, together with record fourth-quarter 2024 profits, caused the stock to jump over 7% in a single session. The bank's guidance for 2025 targets €62 billion in revenue and mid-to-high single-digit net income growth Banco Santander, S.A. (NYSE:SAN) stock is up 55.94% year-to-date. Overall SAN ranks 8th on our list of the financial services stocks that are surging in 2025. While we acknowledge the potential of SAN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than SAN but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
