United Bankshares (NASDAQ:UBSI – Get Free Report) and TowneBank (NASDAQ:TOWN – Get Free Report) are both mid-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, dividends, profitability and risk.
Insider and Institutional Ownership
70.8% of United Bankshares shares are owned by institutional investors. Comparatively, 56.0% of TowneBank shares are owned by institutional investors. 3.7% of United Bankshares shares are owned by insiders. Comparatively, 8.1% of TowneBank shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for United Bankshares and TowneBank, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| United Bankshares | 0 | 3 | 1 | 0 | 2.25 |
| TowneBank | 0 | 0 | 2 | 0 | 3.00 |
Profitability
This table compares United Bankshares and TowneBank’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| United Bankshares | 22.05% | 7.58% | 1.23% |
| TowneBank | 14.89% | 7.32% | 0.90% |
Risk & Volatility
United Bankshares has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, TowneBank has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500.
Dividends
United Bankshares pays an annual dividend of $1.48 per share and has a dividend yield of 3.9%. TowneBank pays an annual dividend of $1.00 per share and has a dividend yield of 2.9%. United Bankshares pays out 56.1% of its earnings in the form of a dividend. TowneBank pays out 50.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. United Bankshares has raised its dividend for 25 consecutive years and TowneBank has raised its dividend for 12 consecutive years. United Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares United Bankshares and TowneBank”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| United Bankshares | $1.03 billion | 4.94 | $366.31 million | $2.64 | 14.26 |
| TowneBank | $673.10 million | 3.83 | $153.71 million | $1.99 | 17.27 |
United Bankshares has higher revenue and earnings than TowneBank. United Bankshares is trading at a lower price-to-earnings ratio than TowneBank, indicating that it is currently the more affordable of the two stocks.
Summary
United Bankshares beats TowneBank on 12 of the 17 factors compared between the two stocks.
About United Bankshares
United Bankshares, Inc., through its subsidiaries, primarily provides commercial and retail banking products and services in the United States. It operates through two segments, Community Banking and Mortgage Banking. The company accepts checking, savings, and time and money market accounts; individual retirement accounts; and demand deposits, statement and special savings, and NOW accounts. Its loan products include commercial loans and leases to small to mid-size industrial and commercial companies; construction and real estate loans, such as commercial and residential mortgages, and loans secured by owner-occupied real estate; personal, student, credit card receivables, personal, commercial, and floor plan loans; and home equity loans. In addition, the company provides credit cards; safe deposit boxes, wire transfers, and other banking products and services; investment and security services; services to correspondent banks, including buying and selling federal funds; automated teller machine services; and internet and telephone banking services. Further, it offers community banking services, such as asset management, real property title insurance, financial planning, mortgage banking, and brokerage services, as well as investment management and retirement planning services. United Bankshares, Inc. was incorporated in 1982 and is headquartered in Charleston, West Virginia.
About TowneBank
TowneBank provides retail and commercial banking services for individuals, commercial enterprises, and professionals. The company operates through three segments: Banking, Realty, and Insurance. It accepts various deposits, including demand deposits, savings accounts, money rate savings, certificates of deposit, and individual retirement accounts. The company also offers secured and unsecured personal loans for financing automobiles, home improvements, education, and personal investments; commercial loans for working capital, business expansion, and equipment and machinery purchases; and mortgage loans, as well as real estate acquisition, development, and construction loans. In addition, it provides other services, such as safe deposit boxes, treasury management services, direct deposit of payroll and social security checks, and automatic drafts for various accounts, as well as online, mobile, and on-call banking services. Further, the company offers documentation services to accomplish tax deferral to investors; investment and asset management services; commercial mortgage brokerage services; and other financial services, such as financial, retirement, and estate planning services, as well as assistance on various investment options comprising alternative investments, annuities, margin accounts, convertible bonds, and pension and profit-sharing plans. Additionally, it provides residential real estate, relocation, property management, vacation rentals, and title and settlement services; and originates residential mortgage loans. The company also offers life, property, casualty, and vehicle insurance services; and employee benefit programs, such as health, dental, vision, and disability insurance. It operates in Richmond, Virginia, the Greater Hampton Roads region in southeastern Virginia, northeastern North Carolina, Raleigh, Charlotte, Greensboro, and Greenville, North Carolina. TowneBank was incorporated in 1998 and is based in Portsmouth, Virginia.
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