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Opinions Darren Sissons
Banco Santander SASANCOMMENTMay 15, 2014
Stock price when the opinion was issued
As of Jun 18, 2026. Market Open.
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Chris StuchberryChris Stuchberry
Rick StuchberryInterest rates will go up after the ECB changes chairs in June 2019. Each quarter they put up $2 billion+ of net income and are trading a hair above book value now, plus negative sentiment to Euro banks now. (3.3% dividend yield, Analysts' price target: $106.76)
Chris StuchberryHe doesn’t own this, but he owns comparable banks. The whole global banking sector is trading at very cheap multiples. They are all under pressure from the flattening yield curve, and they all pay hefty dividends. The bank’s poor performance is sector-driven more than driven by the political issues in the countries where it does business.
He owns this as a European bank holding in the portfolio. The flat yield curve is holding them back. He will continue to hold it for when the yield curve normalizes.
Rick Stuchberry
The issue he has is the regulatory rule that was put in place by the Spanish government which basically said they would guarantee the deferred tax asset. (When you make a loss, you get to carry the loss forward and shield your profits.) A lot of Spanish banks are not paying dividends. If you are not paying dividends or tax, you can build up your capital reserves. It is an artificial financial engineering structure that has enabled the banks to move higher. It has cured the balance sheets and stops the requirement of issued capital but hasn’t cured the credit issues that got in the way that caused the problems. If you want global banks, HSBC Holdings (HSBC-N) is better.