Today I am detailing why I consider Banco Santander (LSE: BNC) (NYSE: SAN.US) to be a great value selection selection for earnings as well as income investors.
Growth at a great price
Banco Santander is, of course, a favoured pick with those seeking to bump up their income streams, with one of the most lucrative dividend policies currently on the market. Despite a backcloth of consistent bottom-line pressure, the bank has maintained its policy of offering above-average yields.
In a bid to create a more sustainable dividend programme in line with earnings, however, the business is anticipated to cut the payout to 56.9 cents this year and again, to 50.5 cents, in 2015. Still, these payments produce whopping yields of 7.6% and 6.8% respectively, trampling a forward average of 3% for the rest of the banking sector.
And in my opinion, the bank can also be considered an ultra-savvy pick for growth investors. After years of consistent earnings pressure 
following the 2008/2009 banking crisis, the banking leviathan finally managed to post earnings growth in 2013 mainly as a result of lower write-downs in the beleaguered regions of Southern Europe.
Following last year’s stunning 74% earnings advance, City analysts expect the Spanish institution to deliver bubbly growth of 23% and 20% in 2014 and 2015 correspondingly.
These readings leave Santander trading on a P/E multiple of 15 for this year, bang on the watermark that represents reasonable value for money and which also matches the prospective average for the complete banking sector. And next year’s further improvement drives this figure down to just 12.5.
And the firm’s miserly price to earnings to growth (PEG) numbers for the medium term rubber stamp the bank’s position as a bargain earnings pick — for both 2014 and 2015 Santander carries a readout of 0.6, comfortably below a figure of 1 which is generally considered tremendous value.
The bank has excellent exposure to emerging markets, particularly those of Latin America — indeed, the firm announced plans to purchase the 25% stake in its Santander Brasil division currently listed on the stock exchange for €4.69bn in May, underlining its confidence in the region. With conditions in Europe also on the mend, I believe that Santander’s pan-global presence makes it a solid contender for those seeking long-term earnings growth.
