City Holding (NASDAQ: CHCO) and United Bankshares (NASDAQ:UBSI) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, risk, dividends and earnings.

Insider and Institutional Ownership

62.5% of City Holding shares are owned by institutional investors. Comparatively, 62.3% of United Bankshares shares are owned by institutional investors. 3.9% of City Holding shares are owned by insiders. Comparatively, 6.2% of United Bankshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares City Holding and United Bankshares’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
City Holding $182.49 million 5.54 $59.81 million $3.83 16.89
United Bankshares $537.56 million 6.72 $199.43 million $1.90 18.11

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.

Dividends

City Holding pays an annual dividend of $1.76 per share and has a dividend yield of 2.7%. United Bankshares pays an annual dividend of $1.32 per share and has a dividend yield of 3.8%. City Holding pays out 46.0% of its earnings in the form of a dividend. United Bankshares pays out 69.5% 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.

Analyst Recommendations

This is a summary of current ratings and recommmendations for City Holding and United Bankshares, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
City Holding 0 2 0 0 2.00
United Bankshares 0 4 0 0 2.00

City Holding presently has a consensus target price of $66.50, indicating a potential upside of 2.78%. United Bankshares has a consensus target price of $42.50, indicating a potential upside of 23.55%. Given United Bankshares’ higher possible upside, analysts plainly believe United Bankshares is more favorable than City Holding.

Profitability

This table compares City Holding and United Bankshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
City Holding 29.07% 12.62% 1.46%
United Bankshares 25.20% 6.42% 1.00%

Volatility & Risk

City Holding has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, United Bankshares has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500.

Summary

United Bankshares beats City Holding on 8 of the 14 factors compared between the two stocks.

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.

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.

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