Financial Analysis: United Community Banks (UCB) versus The Competition

United Community Banks (NASDAQ:UCB) is one of 316 publicly-traded companies in the “State commercial banks” industry, but how does it contrast to its rivals? We will compare United Community Banks to similar companies based on the strength of its analyst recommendations, valuation, profitability, risk, earnings, dividends and institutional ownership.

Profitability

This table compares United Community Banks and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Community Banks	13.04%	8.36%	0.99%
United Community Banks Competitors	16.84%	9.85%	0.90%

Insider and Institutional Ownership

82.3% of United Community Banks shares are owned by institutional investors. Comparatively, 54.2% of shares of all “State commercial banks” companies are owned by institutional investors. 0.5% of United Community Banks shares are owned by insiders. Comparatively, 10.7% of shares of all “State commercial banks” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

United Community Banks pays an annual dividend of $0.96 per share and has a dividend yield of 2.9%. United Community Banks pays out 62.3% of its earnings in the form of a dividend. As a group, “State commercial banks” companies pay a dividend yield of 2.1% and pay out 31.0% of their earnings in the form of a dividend.

Valuation and Earnings

This table compares United Community Banks and its rivals top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
United Community Banks	$1.31 billion	$187.54 million	21.51
United Community Banks Competitors	$1.98 billion	$335.45 million	17.01

United Community Banks’ rivals have higher revenue and earnings than United Community Banks. United Community Banks is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a breakdown of recent ratings and price targets for United Community Banks and its rivals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Community Banks	0	2	0	0	2.00
United Community Banks Competitors	1997	10653	7335	336	2.30

United Community Banks currently has a consensus target price of $29.00, suggesting a potential downside of 12.47%. As a group, “State commercial banks” companies have a potential downside of 7.09%. Given United Community Banks’ rivals stronger consensus rating and higher probable upside, analysts clearly believe United Community Banks has less favorable growth aspects than its rivals.

Risk & Volatility

United Community Banks has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, United Community Banks’ rivals have a beta of 0.54, indicating that their average share price is 46% less volatile than the S&P 500.

Summary

United Community Banks rivals beat United Community Banks on 10 of the 15 factors compared.

United Community Banks Company Profile

United Community Banks, Inc. operates as the financial holding company for United Community Bank that provides financial products and services to commercial, retail, government, education, energy, health care, and real estate sectors. It accepts various deposit products, including checking, savings, money market, and other deposit accounts. The company also offers lending services, including real estate, consumer, and commercial loans, to individuals, small businesses, mid-sized commercial businesses, and non-profit organizations, as well as secured and unsecured, and mortgage loans. In addition, it originates loans partially guaranteed by the SBA and USDA loan programs. Further, the company provides wealth management services comprising financial planning, customized portfolio management, and investment advice; trust services to manage fiduciary assets; non-deposit investment products; and insurance products, including life insurance, long-term care insurance, and tax-deferred annuities, as well as invests in residential and commercial mortgage-backed securities, asset-backed securities, the U.S. treasury, the U.S. agency, and municipal obligations. Additionally, it offers reinsurance on a property insurance contract; insurance agency services; treasury management; credit cards; payment and commerce solution, equipment finance, investment advisory, and other related financial services; brokerage services; and payment processing, merchant, wire transfer, private banking, and other related financial services. The company was founded in 1950 and is headquartered in Blairsville, Georgia.