This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

How Healthy Is Banco Santander?

Excluding non-recurring items, in the fourth quarter 2012 SAN had what it calls an increase in "attributable profit" of almost 18%.

I'd recommend that before you invest in shares of SAN you carefully read its official first-quarter 2013 financial report.

As you look at the five-year chart of SAN's stock price below you can see that it bounced off its 52-week low of $4.88 and has moved steadily higher in choppy fashion. The big questions now include can it sustain its dividend and is last quarter's 10% year-over-year decrease in revenue to $33.81 billion a harbinger for the rest of 2013. SAN Chart SAN data by YCharts

Since Banco Santander's business model includes providing financial advice and asset management for high-net-worth clients, private equity for venture capital, brokerage of insurance products and a robust credit card division, an economic recovery in Europe should help reverse SAN's fortunes.

This global financial titan even has a collection services and payment processing segment for merchants in numerous nations. Yet, in the first quarter of 2013 its quarterly year-over-year EPS was down 26%, despite a hearty 23.33% trailing 12-month operating margin.

So the news from SAN's Argentine subsidiary will be just one small insight into the Spanish company's condition. I say "small" because Argentina is not one of its major profit centers. Also I want to point out that SAN's payout ratio for its dividend is, according to Morningstar, a hard to sustain 222%.

If its quarterly report is accurate, SAN has over $480 billion in total cash as of the quarter ending March 31, 2013. It claims that it earned $3.41 per share in revenue in the first quarter 2013. The two analysts that cover SAN are estimating close to a 30% increase in sales growth and revenue for all of 2013.

If you choose to buy shares of SAN I wholeheartedly encourage you to use a stealth trailing stop-loss system that lets you monitor your positions as well as set and receive alerts on trailing stop levels so you can know the optimum time to sell and thus protect yourself from unacceptable losses.

If the global economy improves, and with the eurozone's continued recovery on the back of the central bank's monetary accommodation, companies like Banco Santander should directly benefit. If we can believe the key financial numbers on SAN then there may be even more to celebrate in short order.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
SAN $3.90 0.00%
AAPL $95.01 0.00%
FB $99.75 0.00%
GOOG $682.74 0.00%
TSLA $147.99 0.00%


Chart of I:DJI
DOW 16,027.05 -177.92 -1.10%
S&P 500 1,853.44 -26.61 -1.42%
NASDAQ 4,283.7530 -79.3910 -1.82%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs