Grupo Financiero Santander Mexico (BSMX)
Market Cap: $14.9 billion
Dividend Yield: 11.4%
YTD Price Performance: -20%
Grupo Financiero Santander Mexico (BSMX) is the Mexican arm of Banco Santander (SAN), the sprawling Spanish bank. Like its parent, BSMX is having a tough time. BSMX plans to issue $1.18 in dividends in the next 52 weeks, which would be a yield of 11.4%, based on current prices. But even that isn’t enough to make up for the troubles it’s facing.
Profit fell 29% for the most recent fiscal year on much higher provisions for loan losses, and analysts aren’t expecting business to get better this year. Indeed, BSMX stock has suffered a slew of analyst estimate cuts and downgrades recently.
Most worrisome is that the Mexican banking sector and economy is doing fairly well. The profitability problems at BSMX are company-specific, including “an inflated 2013 profit base,” according to analysts at Citigroup.
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As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.