September 14, 2023
Top 10 Stock Santander Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Santander – Top 10 Stock in Iberia Index IBEX 35
Santander is listed as a top 10 stock on September 14, 2023 in the market index IBEX 35 because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 33 (33% performer), Obermatt assesses an overall hold recommendation for Santander on September 14, 2023.
Snapshot: Obermatt Ranks
| Country | Spain |
| Industry | Diversified Banks |
| Index | EURO STOXX 50, IBEX 35, Customer Focus EU, Employee Focus EU, Renewables Users |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Santander Hold
| 360 METRICS | September 14, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 80 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 46 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 4 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 50 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 33 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 33 (better than 33% compared with alternatives), overall professional sentiment and financial characteristics for the stock Santander are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Santander. The consolidated Value Rank has an attractive rank of 80, which means that the share price of Santander is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 80% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 50, which means that professional investors are more optimistic about the stock than for 50% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 46, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 4, meaning the company has a riskier financing structure than 96 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 33, Santander is worse than 67% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 80) and positive market sentiment in the professional investor community (Sentiment Rank of 50), but growth expectations are below-average (Growth Rank of 46) and the financing structure is on the risky side(Safety Rank of 4). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Santander is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Santander positive
ANALYSIS: With an Obermatt Sentiment Rank of 50 (better than 50% compared with alternatives), overall professional sentiment and engagement for the stock Santander is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Santander. Analyst Opinions are at a rank of 60 (better than 60% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 63, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Santander. Finally, the Professional Investors rank is 76, which means that currently, professional investors hold more stock in this company than in 76% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 50 (more positive than 50% compared with investment alternatives), Santander has a reputation among professional investors that is above-average compared with that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 27, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 73% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Santander is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Santander Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 80 (better than 80% compared with alternatives) for 2023, Santander shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Santander. Price-to-Sales is 88 which means that the stock price compared with what market professionals expect for future sales is lower than for 88% of comparable companies, indicating a good value for Santander's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 79% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 74. Compared with other companies in the same industry, dividend yields of Santander are expected to be higher than for 53% of all competitors (a Dividend Yield rank of 53). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 80, is a buy recommendation based on Santander's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Santander based on its detailed value metrics.
Growth Strategy: Santander Growth Momentum low
| GROWTH METRICS | September 14, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 70 |
|
||||||
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 26 |
|
||||||
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 39 |
|
||||||
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 77 |
|
||||||
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 46 |
|
||||||
ANALYSIS: With an Obermatt Growth Rank of 46 (better than 46% compared with alternatives), Santander shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Santander. Sales Growth has a rank of 70 which means that currently professionals expect the company to grow more than 70% of its competitors. Stock Returns are also above average with a rank of 77. But Capital Growth has only a rank of 39, which means that currently professionals expect the company to grow its invested capital less than 61% of its competitors. Profit Growth is also low, with a rank of only 26, which means that, currently, professionals expect the company to grow its profits below average. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 46, is a hold recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 77% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. ...read more
Safety Strategy: Santander Debt Financing Safety risky
| SAFETY METRICS | September 14, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 30 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 36 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 10 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 4 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 4 (better than 4% compared with alternatives), the company Santander has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Santander is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Santander. Liquidity is at 10, meaning that the company generates less profit to service its debt than 90% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 30, meaning the company has an above-average debt-to-equity ratio. It has more debt than 70% of its competitors. Finally, Refinancing is at a rank of 36 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 64% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 4 (worse than 96% compared with alternatives), Santander has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: Santander Below-Average Financial Performance
| COMBINED PERFORMANCE | September 14, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 80 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 46 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 10 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 32 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 32 (worse than 68% compared with investment alternatives), Santander (Diversified Banks, Spain) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Santander are a good value (attractively priced) with a consolidated Value Rank of 80 (better than 80% of alternatives) but show below-average growth (Growth Rank of 46), and are riskily financed (Safety Rank of 4), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 32, is a hold recommendation based on Santander's financial characteristics. As the company Santander's key financial metrics exhibit good value (Obermatt Value Rank of 80) but low growth (Obermatt Growth Rank of 46) and risky financing practices (Obermatt Safety Rank of 4), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 80% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.