United Bankshares (NASDAQ: UBSI) and City Holding (NASDAQ:CHCO) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, risk, institutional ownership, dividends, profitability and earnings.
United Bankshares pays an annual dividend of $1.32 per share and has a dividend yield of 3.7%. City Holding pays an annual dividend of $1.76 per share and has a dividend yield of 2.7%. United Bankshares pays out 69.5% of its earnings in the form of a dividend. City Holding pays out 46.0% 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.
Earnings and Valuation
This table compares United Bankshares and City Holding’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|United Bankshares||$537.56 million||6.89||$199.43 million||$1.90||18.58|
|City Holding||$182.49 million||5.68||$59.81 million||$3.83||17.32|
United Bankshares has higher revenue and earnings than City Holding. City Holding is trading at a lower price-to-earnings ratio than United Bankshares, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
United Bankshares has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500. Comparatively, City Holding has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500.
This is a breakdown of current ratings and price targets for United Bankshares and City Holding, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
United Bankshares presently has a consensus target price of $42.50, indicating a potential upside of 20.40%. City Holding has a consensus target price of $66.50, indicating a potential upside of 0.27%. Given United Bankshares’ higher probable upside, equities analysts plainly believe United Bankshares is more favorable than City Holding.
This table compares United Bankshares and City Holding’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
62.3% of United Bankshares shares are owned by institutional investors. Comparatively, 62.5% of City Holding shares are owned by institutional investors. 6.2% of United Bankshares shares are owned by insiders. Comparatively, 3.9% of City Holding shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
United Bankshares beats City Holding on 8 of the 14 factors compared between the two stocks.
About United Bankshares
United Bankshares, Inc. (United) is a bank holding company. The Company operates through community banking segment. United’s Banking Subsidiaries offer a range of commercial and retail banking services and products. United, through its subsidiaries, engages in community banking and offers banking products and services permitted by law and regulation. Included among the banking services offered are the acceptance of deposits in checking, savings, time and money market accounts; the making and servicing of personal, commercial, floor plan and student loans, and the making of construction and real estate loans. Also offered are individual retirement accounts, safe deposit boxes, wire transfers and other standard banking products and services. As part of its lending function, the Banking Subsidiaries offer credit card services. The Company’s loan portfolio consists of commercial, real estate and consumer loans, including credit card and home equity loans.
About City Holding
City Holding Company is a financial holding company. The Company conducts its principal activities through its subsidiary, City National Bank of West Virginia (City National). As of December 31, 2016, the City National provided banking, trust and investment management and other financial solutions through its network of 85 banking offices located in the states of West Virginia, Virginia, eastern Kentucky and southeastern Ohio. City National offers various products and services, including commercial banking, consumer banking, mortgage banking, and wealth management and trust services. City National provides credit, deposit and investment advisory products and services to rural and small community markets in addition to cities, including Charleston, Huntington, Martinsburg, Winchester, Staunton, Virginia Beach, Ashland and Lexington. City National offers a range of commercial banking services to corporations and other business customers.
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