Investors have shied away from financial stocks lately. Many are a little gun-shy after the financial crises of 2008, Europe’s debt crisis, and all the uncertainty in the world’s economies, but that doesn’t mean they are right. We think financial stocks are oversold as a group and a well-diversified portfolio of them should outperform the market over the long run. This statement is also valid for foreign financial stocks as well. In this article we will take a look at 5 foreign financial stocks priced under $10 a share that analysts rate as strong buys:
1. AEGON NV (AEG) is a life insurance company based in the Netherlands. It has a $9.13B market cap and is currently trading at 8.69 times its earnings. The company has a 2.20 beta. AEG’s currently trading a $4.54 a share. Analysts predict the stock will top $6 within the next 12 months. AEG’s biggest competitor is MetLife (MET). MET has the larger market cap at $36.34B (AEG is just $8.54B), but AEG has a lot going for it. AEG has greater quarterly growth (155% vs. MET’s 56.90%) and a lower P/E ratio (10.27 vs. MET’s 14.64). Ken Griffin’s Citadel Investment Group likes AEG.
2. ING Groep NV (ING) is a life insurance company based in the Netherlands. It has a $32.98B market cap and is trading at 7.30 times its earnings. ING has a 2.76 beta. ING’s closest competitor is AXA (OTCQX:AXAHY). AXA has a lower P/E ratio (4.33 to ING’s 6.00), a higher market cap ($33.04B vs. ING’s $30.99B) and greater income ($7.57B vs. ING’s $5.18B). Analysts rate both stocks as a strong buy. The only reason AXA didn’t make it onto our list is the stock is currently trading at $14.32 a share, so it is over our $10 limit. ING is still a strong performer. Analysts expect the stock will rise to $15 within the next year, up from its current price of $8.16 a share. David Dreman’s Dreman Value Management is a fan of ING.
3. Mizuho Financial Group (MFG) is in the money center banks industry and is based in Japan. It has a $21.37B market cap and is trading at 13.14 times its earnings. MFG has a beta of 1.00. One of MFG’s competitors is Citigroup (C). The company is much larger ($87.94B market cap compared to MFG’s $59.69B) and has higher revenue ($65.78B vs. MFG’s $28.01B). The difference is that analysts are 100% behind this company while C is only rated a hold. MFG is currently trading at $2.74. Analysts expect the stock will reach $4.11 within the next 12 months. Jim Simons’ Renaissance Technologies is bullish about MFG.
4. Mitsubishi UFJ Financial Group (MTU) is in the money center banks industry and is also based in Japan. It has a $61.01B market cap and is trading at 10.51 times its earnings. MTU has the lowest beta we looked at, coming in at just 0.87. One of MTU’s closest competitors is Sumitomo Mitsui Financial (SMFG). MTU has greater quarterly growth than SMFG (29.70% vs. SMFG’s 23.20%) and higher net income ($9.92B compared to SMFG’s $5.95B). MTU is currently trading at $4.24 a share. Analysts predict the stock will reach $6.09 within the next year. MFG is a favorite Ken Fisher’s Fisher Asset Management.
5. Banco Santander SA (STD) is in the money center banks industry and is based in Spain. The company has a $68.87B market cap and is trading at 6.14 times its earnings. It has a 1.73 beta. It recently traded at $7.84 a share. Analysts estimate the stock will reach $10 in the next 12 months. STD’s closest comparable company is Banco Bilbao Vizcaya Argentaria SA (BBVA). STD has higher revenue ($45B to BBVA’s $22B) and greater quarterly growth (3.80% vs. BBVA’s -4.50%). Both Ken Fisher’s Fisher Asset Management and David Dreman’s Dreman Value Management have positions in STD.
Disclosure: I am long C.
