Critical Review: Svenska Handelsbanken AB (publ) (OTCMKTS:SVNLY) versus Fidelity D & D Bancorp (NASDAQ:FDBC)

Fidelity D & D Bancorp (NASDAQ:FDBC) and Svenska Handelsbanken AB (publ) (OTCMKTS:SVNLY) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

20.0% of Fidelity D & D Bancorp shares are owned by institutional investors. 17.7% of Fidelity D & D Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Fidelity D & D Bancorp and Svenska Handelsbanken AB (publ)”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fidelity D & D Bancorp	$72.34 million	4.36	$18.21 million	$2.68	20.50
Svenska Handelsbanken AB (publ)	$16.45 billion	1.26	$2.74 billion	$0.66	7.95

Svenska Handelsbanken AB (publ) has higher revenue and earnings than Fidelity D & D Bancorp. Svenska Handelsbanken AB (publ) is trading at a lower price-to-earnings ratio than Fidelity D & D Bancorp, indicating that it is currently the more affordable of the two stocks.

Dividends

Fidelity D & D Bancorp pays an annual dividend of $1.60 per share and has a dividend yield of 2.9%. Svenska Handelsbanken AB (publ) pays an annual dividend of $0.37 per share and has a dividend yield of 7.0%. Fidelity D & D Bancorp pays out 59.7% of its earnings in the form of a dividend. Svenska Handelsbanken AB (publ) pays out 56.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Fidelity D & D Bancorp has increased its dividend for 10 consecutive years. Svenska Handelsbanken AB (publ) is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Fidelity D & D Bancorp has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500. Comparatively, Svenska Handelsbanken AB (publ) has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Fidelity D & D Bancorp and Svenska Handelsbanken AB (publ), as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fidelity D & D Bancorp	0	0	0	0	N/A
Svenska Handelsbanken AB (publ)	1	0	0	0	1.00

Profitability

This table compares Fidelity D & D Bancorp and Svenska Handelsbanken AB (publ)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fidelity D & D Bancorp	13.30%	10.68%	0.82%
Svenska Handelsbanken AB (publ)	14.66%	13.64%	0.74%

About Fidelity D & D Bancorp

Fidelity D & D Bancorp, Inc. operates as the bank holding company for The Fidelity Deposit and Discount Bank that provides a range of banking, trust, and financial services to individuals, small businesses, and corporate customers. The company accepts savings, club, interest-bearing and non-interest-bearing checking, money market, and short- and long-term time deposits, as well as certificates of deposit. It also offers commercial and industrial, commercial real estate, consumer, and residential mortgage loans. In addition, the company provides alternative financial and insurance products with asset management services. The company was founded in 1902 and is headquartered in Dunmore, Pennsylvania.

About Svenska Handelsbanken AB (publ)

Svenska Handelsbanken AB (publ) provides various banking products and services for private and corporate customers primarily in Sweden, the United Kingdom, Norway, the Netherlands, the United States, Luxembourg, Finland, and Poland. The company offers savings, transactions, business, currency, and investment accounts, as well as accounts for cash pool, and forestry and agriculture; mortgage and committed loans, and private loans; mutual funds; pension products; credit and debit cards; and payment and reconciliation services, as well as foreign exchange rate services. It also provides financing for investments, such as equipment, cars, computers, and other inventories, as well as vehicle and real estate financing services; green loans and advisor services; investment and other financing services; medical care, and group and health insurance products; forestry and farming banking products; and online and mobile banking services, as well as various banking services for children and young people. In addition, the company offers financial services, that includes asset management, transactional banking, corporate finance, financing, markets, trade finance, market information and research services to large corporations; cash management solutions; and various corporate banking services to small and medium-sized companies and large corporates, as well as private banking services. Svenska Handelsbanken AB (publ) was incorporated in 1871 and is headquartered in Stockholm, Sweden.