Itaú Unibanco (ITUB) is the largest privately held bank in Brazil, the result of the 2008 merger between Banco Itaú and Unibanco.

In addition to Brazil, the bank has significant operations in Chile, Colombia, Argentina, Uruguay, and Paraguay. Itaú's commercial and consumer loans account for 33% and 44%% of the bank’s total loans, respectively, while foreign loans account for 23% of its portfolio. The bank also operates the fifth-largest insurer in Brazil and is the second-largest asset manager in the country, giving it broad reach over the Brazilian financial system.

The company was formerly known as Itaú Unibanco Banco Múltiplo S.A. and changed its name to Itaú Unibanco Holding S.A. in April 2009.

The company was incorporated in 1924 and is headquartered in São Paulo, Brazil.

Itaú Unibanco Holding S.A. operates as a subsidiary of IUPAR - Itaú Unibanco Participações S.A.

Three key data points gauge Itau Unibanco Holding SA or any dividend-paying firm.

The key three are:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.

ITUB Price

Over the past year, Itau’s share price rose about 6% from $5.31 to $5.63 as of Wednesday’s market close.

If ITUB stock trades in the range of $4.00 to $7.00 this next year, its recent $5.63 share price might rise to $6.50 by next year. Of course, ITUB’s price could drop about the same $0.87 estimated amount or more.

My upside estimate of $0.87, however, is $0.05 over the median of one-year target prices expiated by ten analysts covering ITUB for brokers.

ITUB Dividend

Itau Unibanco has paid variable monthly dividends since September 13, 2001. Itau’s most recent Monthly dividend, paid on September 5th to shareholders of record on June 20th, was $0.05. Its estimated annual return of $0.30 casts a forward yield of 5.33% per Wednesday’s closing price.

ITUB Returns

Add the $0.30 anticipated annual dividend to Itau Unibanco Holding’s estimated $0.87 possible price upside, revealing a $1.17 potential gross gain per share for the coming year.

At Wednesday’s $5.63 closing price, a little over $1000 would buy 178 shares.

A $10 broker fee (if charged), paid half at purchase and half at sale, might cost us about $0.055 per share.

Subtracting that maybe $0.055 brokerage cost from my estimated $1.17 gross gain per share makes a net gain of $1.115 X 178 shares = $198.47 or about a 19.75% net gain.

This may be the time to pounce on Itau Unibanco Holding SA shares. But beware, ITUB is an established banking firm doing business in a volatile environment. However, the recently estimated $53.30 dividend from $1000 invested comes in at about 9.5 times the recent $5.63 single share price. The choice is yours.

Remember the true value of any stock is best realized by your personal ownership of shares.

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