United Bankshares (NASDAQ:UBSI – Get Free Report) and Enterprise Financial Services (NASDAQ:EFSC – Get Free Report) are both mid-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, valuation, analyst recommendations, earnings, risk and institutional ownership.
Volatility and Risk
United Bankshares has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, Enterprise Financial Services has a beta of 0.99, meaning that its share price is 1% 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 3.6%. Enterprise Financial Services pays an annual dividend of $1.08 per share and has a dividend yield of 1.8%. United Bankshares pays out 56.1% of its earnings in the form of a dividend. Enterprise Financial Services pays out 22.9% 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. United Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| United Bankshares | 22.05% | 7.58% | 1.23% |
| Enterprise Financial Services | 19.73% | 10.81% | 1.24% |
Valuation & Earnings
This table compares United Bankshares and Enterprise Financial Services”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| United Bankshares | $1.54 billion | 3.58 | $366.31 million | $2.64 | 15.41 |
| Enterprise Financial Services | $833.64 million | 2.64 | $194.06 million | $4.72 | 12.54 |
United Bankshares has higher revenue and earnings than Enterprise Financial Services. Enterprise Financial Services is trading at a lower price-to-earnings ratio than United Bankshares, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
70.8% of United Bankshares shares are owned by institutional investors. Comparatively, 72.2% of Enterprise Financial Services shares are owned by institutional investors. 3.7% of United Bankshares shares are owned by company insiders. Comparatively, 2.3% of Enterprise Financial Services shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current ratings and target prices for United Bankshares and Enterprise Financial Services, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| United Bankshares | 0 | 3 | 1 | 0 | 2.25 |
| Enterprise Financial Services | 0 | 0 | 3 | 0 | 3.00 |
United Bankshares presently has a consensus target price of $40.25, suggesting a potential downside of 1.03%. Enterprise Financial Services has a consensus target price of $58.33, suggesting a potential downside of 1.48%. Given United Bankshares’ higher probable upside, equities analysts plainly believe United Bankshares is more favorable than Enterprise Financial Services.
Summary
United Bankshares beats Enterprise Financial Services on 10 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 Enterprise Financial Services
Enterprise Financial Services Corp operates as the holding company for Enterprise Bank & Trust that offers banking and wealth management services to individuals and corporate customers primarily in Arizona, California, Florida, Kansas, Missouri, Nevada, and New Mexico. It provides checking, savings, money market accounts, and certificates of deposit. The company also provides commercial and industrial, commercial real estate, real estate construction and development, residential real estate, small business administration, agricultural, consumer, and other loan products. In addition, it offers treasury management and international trade services; tax credit brokerage services; life insurance premium and sponsor finance; tax credit related lending; other deposit accounts, such as community associations, property management, third party escrow, and trust services; treasury management product and services; customized solutions and products; cash management; fiduciary, investment management, and financial advisory services; and customer hedging products, including international banking, card services, and tax credit businesses. Further, the company provides online, device applications, text, and voice banking; remote deposit capture; internet banking, mobile banking, cash management, positive pay services, fraud detection and prevention, automated payables, check image, and statement and document imaging; and controlled disbursements, repurchase agreements, and sweep investment accounts. Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.
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