Critical Review: Intercorp Financial Services (NYSE:IFS) versus Private Bancorp of America (OTCMKTS:PBAM)

Private Bancorp of America (OTCMKTS:PBAM) and Intercorp Financial Services (NYSE:IFS) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, dividends, valuation and analyst recommendations.

Volatility and Risk

Private Bancorp of America has a beta of 0.15, meaning that its stock price is 85% less volatile than the S&P 500. Comparatively, Intercorp Financial Services has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500.

Institutional and Insider Ownership

13.5% of Private Bancorp of America shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Private Bancorp of America and Intercorp Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Private Bancorp of America	22.11%	17.55%	1.56%
Intercorp Financial Services	21.03%	12.38%	1.38%

Valuation & Earnings

This table compares Private Bancorp of America and Intercorp Financial Services”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Private Bancorp of America	$161.24 million	1.97	$35.54 million	$6.16	8.93
Intercorp Financial Services	$6.54 billion	0.60	$346.47 million	$3.02	11.31

Intercorp Financial Services has higher revenue and earnings than Private Bancorp of America. Private Bancorp of America is trading at a lower price-to-earnings ratio than Intercorp Financial Services, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for Private Bancorp of America and Intercorp Financial Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Private Bancorp of America	0	0	2	0	3.00
Intercorp Financial Services	0	0	1	0	3.00

Private Bancorp of America presently has a consensus price target of $65.50, indicating a potential upside of 19.09%. Intercorp Financial Services has a consensus price target of $30.00, indicating a potential downside of 12.13%. Given Private Bancorp of America’s higher probable upside, research analysts plainly believe Private Bancorp of America is more favorable than Intercorp Financial Services.

Summary

Private Bancorp of America beats Intercorp Financial Services on 8 of the 12 factors compared between the two stocks.

About Private Bancorp of America

Private Bancorp of America, Inc. operates as the bank holding company for CalPrivate Bank that provides banking products and services to individuals and businesses in California. The company offers checking and savings, money market, certificate of deposit, sweep, zero balance, and individual retirement accounts; unsecured lines of credit, personal credit lines, and term loans; additional services, such as direct deposits, online banking, ATM and debit cards, credit cards, savings/line of credit overdraft protection, and safe deposit boxes; and certificate of deposit account registry services. It also provides treasury management, merchant card, bill pay, positive pay, e-statement, remote deposit capture, ACH origination, wire transfer, electronic payments and collections, electronic check acceptance, account reconciliation, cash vault, and gift and business credit cards, as well as funds management services. In addition, the company offers term credit facilities and loans, equipment and business expansion loans, working capital lines of credit, commercial real estate financing, construction financing, letters of credit, business start-up loans, loans for business acquisition and partner buyouts, owner-occupied commercial real estate loans, equipment, furniture and fixture, and other loans; and CDARS And ICS products. Further, it provides wealth management and legal services. The company has offices in La Jolla, San Diego, Coronado, Newport Beach, Beverly Hills, El Segundo, Temecula, Mission Valley, and Redlands. Private Bancorp of America, Inc. was founded in 2006 and is headquartered in La Jolla, California.

About Intercorp Financial Services

Intercorp Financial Services Inc., together with its subsidiaries, offers banking, insurance, wealth management, and payment services for retail and commercial clients in Peru. The company provides loans, credit facilities, deposits, and current accounts; life annuity products with single-premium payment and conventional life insurance products, as well as other retail insurance products; and brokerage and investment management services. It engages in the development, management, operation, and processing of credit and debit cards; facilitation of payments and services through commercial stores; and installation and maintenance of infrastructure for transactions through electronic commerce modality and networks of payment methods processors. The company was incorporated in 1897 and is based in Lima, Peru. Intercorp Financial Services Inc. operates as a subsidiary of Intercorp Perú Ltd.