Critical Comparison: United Security Bancshares (NASDAQ:UBFO) and First Horizon (NYSE:FHN)

United Security Bancshares (NASDAQ:UBFO) and First Horizon (NYSE:FHN) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, profitability, analyst recommendations, earnings, dividends and risk.

Institutional and Insider Ownership

30.9% of United Security Bancshares shares are owned by institutional investors. Comparatively, 80.3% of First Horizon shares are owned by institutional investors. 20.1% of United Security Bancshares shares are owned by insiders. Comparatively, 0.9% of First Horizon shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares United Security Bancshares and First Horizon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Security Bancshares	25.78%	13.96%	1.45%
First Horizon	15.43%	9.51%	1.01%

Valuation & Earnings

This table compares United Security Bancshares and First Horizon”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Security Bancshares	$65.95 million	2.58	$19.80 million	$1.02	9.64
First Horizon	$5.03 billion	2.23	$897.00 million	$1.38	15.31

First Horizon has higher revenue and earnings than United Security Bancshares. United Security Bancshares is trading at a lower price-to-earnings ratio than First Horizon, indicating that it is currently the more affordable of the two stocks.

Dividends

United Security Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 4.9%. First Horizon pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. United Security Bancshares pays out 47.1% of its earnings in the form of a dividend. First Horizon pays out 43.5% 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.

Volatility & Risk

United Security Bancshares has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500. Comparatively, First Horizon has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for United Security Bancshares and First Horizon, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Security Bancshares	0	0	0	0	0.00
First Horizon	0	6	7	0	2.54

First Horizon has a consensus target price of $19.08, indicating a potential downside of 9.72%. Given First Horizon’s stronger consensus rating and higher probable upside, analysts plainly believe First Horizon is more favorable than United Security Bancshares.

Summary

First Horizon beats United Security Bancshares on 10 of the 16 factors compared between the two stocks.

About United Security Bancshares

United Security Bancshares operates as the bank holding company for United Security Bank, a state-chartered bank that provides a range of commercial banking services to the business and professional community, and individuals in California. The company accepts various deposit products, including personal and business checking accounts, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificates of deposit. It also provides real estate mortgage, commercial and industrial, real estate construction and development, and consumer loans, as well as agricultural, installment, and student loans. In addition, the company offers online and mobile banking, safe deposit boxes, wire transfers, payroll direct deposit, cashier's check, cash management, and foreign draft services, as well as interactive teller machines; and person-to-person and bank-to-bank transfers for consumer customers. United Security Bancshares was founded in 1987 and is headquartered in Fresno, California.

About First Horizon

First Horizon Corporation operates as the bank holding company for First Horizon Bank that provides various financial services. The company operates through Regional Banking and Specialty Banking segments. It offers general banking services for consumers, businesses, financial institutions, and governments. The company also accepts deposits; provides underwriting services for bank-eligible securities and other fixed-income securities by financial subsidiaries; sells loans and derivatives; financial planning; and offers investment and financial advisory services. In addition, it offers mortgage banking; loan syndications; brokerage services; commercial and business banking for business enterprises, consumer banking, and private client and wealth management services; capital markets, professional commercial real estate, mortgage warehouse and asset-based lending, franchise and equipment finance, tax credit finance, energy and healthcare finance, asset management, and corporate and correspondent banking services. Further, the company provides transaction processing services including check clearing services and remittance processing, credit cards, investment, and sale of mutual fund and retail insurances, as well as trust, fiduciary, and agency services. First Horizon Corporation was founded in 1864 and is headquartered in Memphis, Tennessee.