Today I am outlining why Banco Santander (LSE: BNC) (NYSE: SAN.US) could be considered an attractive addition to any stocks portfolio.
Peachy prices given current growth estimates
Of course, Santander — like the rest of the banking sector — saw earnings plummet in the years following the global recession of five years ago. But with economic conditions in its key European markets clearly on the mend, huge internal restructuring underway and a sharp reduction 
in impairments helping the bottom line, Santander is anticipated to record solid growth in coming years.
Indeed, the City’s number crunchers expect the bank to follow last year’s blistering 74% earnings improvement with growth to the tune of 23% and 21% in 2014 and 2015 correspondingly.
At face value these earnings projections would appear to already be baked into the share price, however — a forward P/E multiple of 14.9 almost bang on a forward average of 15 for the complete banking sector, even though next year’s reading clocks in a more appetising 12.3.
Still, Santander’s price to earnings to growth (PEG) numbers through to the end of next year suggest that the company remains a bargain at current share prices. Indeed, a reading of 0.7 for this year sits well below the value watermark of 1, while 2015’s reading improves further to 0.6.
Terrific developing market exposure
Of course signs of weaker momentum in emerging nations has dented market sentiment in recent times. And for the likes of Santander — which generates 45% of attributable profit from developing regions in Latin America and Eastern Europe — signs of financial slowdown could have escalating repercussions on revenue growth in the near term.
However, when viewed over a longer time horizon, I believe that exploding population growth and broadly-rising personal affluence levels in these regions provide the bank with an abundance of opportunities. And with the banking sector still to fully cater to the needs of customers in these markets, Santander still has plenty of room to roll out new products and boost the top line.
Smashing dividend yields set to reign
While I reckon that Santander can be considered a decent value pick for growth investors, I believe that the company’s dividend prospects for the coming years are nothing short of spectacular.
In an effort to strengthen the balance sheet by aligning payments more closely with earnings, Santander is expected to reduce last year’s dividend of 60 euro cents per share to 57.1 cents this year. And a more severe cut, to 50.5 cents, is pencilled in for 2015.
Still, predicted payments for this year and next still create jumbo yields of 7.9% and 7% respectively, comfortably taking out a prospective mean of 3.2% for the entire banking sector.
