who gives more money to investors on the stock exchange?

It is not just for consumers that banks and fintechs compete, but also for investors on the stock exchange. Unlike consumers, who have different priorities when choosing a bank or fintech (convenience, reliability, agility, price), the investor has only one objective, profit.

O UOL and Economatica, a financial information platform, carried out a survey to identify which institutions deliver the greatest return on capital and dividends to shareholders. See below who wins the income dispute, whether banks or fintechs, and understand which group shines more in the eyes of market analysts.

Banks have more constant results

The numbers show that digital companies have a more unbalanced team, with some of their representatives outperforming the rest of the team. Banks, on the other hand, form a more cohesive group, with their players achieving similar results.

Between the fintechs or digital banks, a portfolio that encompassed the four largest – BTG (BPAC11), Inter (BIDI4), Stone (STNE) and PagSeguro (PAGES) – it would have presented a very discreet valuation in the last six months, of 1.75%.

The highlights are Banco Inter, with a 25% appreciation, and BTG, with 13%, numbers much higher than those presented by the other two companies.

Stone saw its share value plummet by nearly 43 percent after announcing a second share offering in April. PagSeguro, down 2%, had as one of the reasons for the devaluation a speculation, in July, about a possible purchase of the Bank BV.

The two companies do not have securities listed directly on the Brazilian stock exchange — to buy them, you have to buy their BDRs or buy their securities through foreign brokers.

Among traditional banks, the average appreciation was 15.38% since March, with prices pushed by Itaú (ITUB4), which recorded a 24% increase. Santander (SANB11) and Bradesco (BBDC4) had similar appreciation, 12% and 16%. The Bank of Brazil (BBAS3) follows the most discounted among banks, with an appreciation of almost 10%.

Fintechs, however, have more upside potential.

For Danielle Lopes, partner of Nord Research, the digital banks that were highlighted may offer greater gains for the coming months, but always linked to risk.

“They can adapt quickly to environments and are much smaller, so smaller acquisitions would make them change levels very quickly, which is a great advantage for investors looking to surf growth,” he says.

O BTG it is the highlight, according to the analyst, due to the expansion of its retail business, while Inter’s valuation engine is the growth of its customer base and business verticals.

Among traditional banks, Lopes highlights Itaú, which still has room to grow.

Banks are better option, say analysts

Phil Soares, head of stock analysis at Orama, highlights the profitability capacity of large banks, which, according to him, still operate at a value below the historical level.

“Our perspective is that today’s prices are an opportunity for entry. Within this niche of large banks, we prefer Bradesco’s shares,” he says.

About Itaú, Soares says that there is still room for a rise. “Of course, of the banks, is the one with the most vulnerable model to increased competition for fintechs, but we believe that the current value is below the perspective of profitability,” he says.

alexander Masuda, partner of SFA, also sees banks as the best option at the moment. He assesses that the price of fintechs and digital banking is overdone and that these companies “are paying for all the growth in advance.”

At the same time, he sees that there will not be such a big change in the structure of the financial sector capable of causing such significant losses to big banks. For the analyst, Itaú is, among the options, the one that most tends to offer long-term returns.

Dividends are attractive to banks

Traditional banks were, throughout this year, the biggest payers of dividends to their shareholders, losing only to Vale and Petrobras.

Nothing on the horizon suggests a change, analysts say, not even the possibility of withdrawing the tax break on dividends, which is being discussed in Congress.

Masuda states that, even if the taxation of dividends passes, the reduction of taxation on Corporate Income Tax, which is also provided for in the PL, could neutralize the reduction in income for those who receive the proceeds from large banks.

“If the IR of banks were to fall, it could offset the taxation of dividends for the investor because the large banks have a very high total tax rate, with 45% of the IR and social contribution added together,” he says.

Luciana Ikedo, investment advisor and partner at the office RV4 Investments, agrees that, even if there is taxation of dividends, the offer of a recurring income will continue to be a differential for banks.

“Dividends would continue to be interesting, of course, less profitable than today, but they should continue to make up the portfolio with other products,” he says.

Among the dividend payers, she highlights Bradesco as the best, both for profitability and for the periodicity of payments, which is monthly. This year, however, the bank was behind its competitor Santander in distributed volume.

The survey of economics shows that all traditional banks distributed, from January to June, more than R$ 3 billion each in dividends. Digital banks have a much more discreet distribution, being the BTG the only one to surpass the billionth house. At fintechs PagSeguro and Stone did not pay dividends this year because of the losses.

For Ikedo, the devaluation of shares and the end of the payment of dividends by Stone and PagSeguro reflect the difficulty of companies in responding to the increased competition in the payment means segment, which is being captured by large banks, digital banks via social networks, PIX and acquisition from other banks.

At fintechs are, for her, “companies that move in the opposite direction of BTG and Inter, which follow the path of binding and complete customer service”.

See below the volume of dividends distributed by banks and fintechs from January to June 2021:

Santander (SANB11): BRL 4.1 billion
Bradesco (BBDC4): BRL 3.9 billion
Bank of Brazil (BBAS3): BRL 3.7 billion
Itaú (ITUB4): BRL 3.2 billion
BTG (BPAC11): BRL 1.1 billion
Interbank (BIDI4): BRL 10.3 million
Insurance Payment (PAGES): does not pay dividends since December 2017
Stone (STNE): does not pay dividends since December 2020