HDFC Bank (NYSE:HDB – Get Free Report) and ICICI Bank (NYSE:IBN – Get Free Report) are both large-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.
Profitability
This table compares HDFC Bank and ICICI Bank’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| HDFC Bank | 15.84% | 11.70% | 1.68% |
| ICICI Bank | 25.84% | 14.48% | 1.88% |
Analyst Recommendations
This is a summary of current recommendations and price targets for HDFC Bank and ICICI Bank, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| HDFC Bank | 1 | 2 | 1 | 0 | 2.00 |
| ICICI Bank | 0 | 1 | 1 | 2 | 3.25 |
HDFC Bank presently has a consensus price target of $26.10, indicating a potential upside of 0.56%. Given HDFC Bank’s higher probable upside, analysts clearly believe HDFC Bank is more favorable than ICICI Bank.
Institutional and Insider Ownership
17.6% of HDFC Bank shares are held by institutional investors. Comparatively, 18.2% of ICICI Bank shares are held by institutional investors. 1.0% of HDFC Bank shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares HDFC Bank and ICICI Bank”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| HDFC Bank | $54.16 billion | 2.46 | $7.51 billion | $1.75 | 14.83 |
| ICICI Bank | $22.73 billion | 5.51 | $6.13 billion | $1.68 | 20.75 |
HDFC Bank has higher revenue and earnings than ICICI Bank. HDFC Bank is trading at a lower price-to-earnings ratio than ICICI Bank, indicating that it is currently the more affordable of the two stocks.
Dividends
HDFC Bank pays an annual dividend of $0.34 per share and has a dividend yield of 1.3%. ICICI Bank pays an annual dividend of $0.21 per share and has a dividend yield of 0.6%. HDFC Bank pays out 19.4% of its earnings in the form of a dividend. ICICI Bank pays out 12.5% 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.
Volatility & Risk
HDFC Bank has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500. Comparatively, ICICI Bank has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500.
Summary
ICICI Bank beats HDFC Bank on 9 of the 16 factors compared between the two stocks.
About HDFC Bank
HDFC Bank Limited is an India-based banking and financial services company headquartered in Mumbai. Incorporated in 1994, it began banking operations in 1995 and serves individuals, businesses and institutions across India. The bank offers savings and current accounts, deposits, loans, credit and debit cards, payment services, and digital banking. Its business also includes wholesale banking, treasury services and wealth management. In 2023, HDFC Limited, a housing finance company, merged with HDFC Bank, bringing its housing finance activities into the bank.
About ICICI Bank
ICICI Bank is an India-based banking and financial services company headquartered in Mumbai. It serves individuals, businesses, and institutions through a broad range of services, including savings and current accounts, loans, credit cards, payments, investment products, and corporate banking. The bank operates primarily in India and also serves customers internationally through overseas branches, subsidiaries, and other offices. Its offerings include retail and commercial banking, wholesale banking, treasury services, and digital banking through online and mobile platforms.
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