United Bankshares (NASDAQ: UBSI) and NBT Bancorp (NASDAQ:NBTB) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, risk and analyst recommendations.

Institutional and Insider Ownership

62.2% of United Bankshares shares are held by institutional investors. Comparatively, 49.2% of NBT Bancorp shares are held by institutional investors. 6.2% of United Bankshares shares are held by insiders. Comparatively, 2.8% of NBT Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for United Bankshares and NBT Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Bankshares 0 4 0 0 2.00
NBT Bancorp 0 3 0 0 2.00

United Bankshares currently has a consensus price target of $42.50, suggesting a potential upside of 15.65%. NBT Bancorp has a consensus price target of $35.50, suggesting a potential downside of 5.48%. Given United Bankshares’ higher possible upside, research analysts plainly believe United Bankshares is more favorable than NBT Bancorp.

Dividends

United Bankshares pays an annual dividend of $1.32 per share and has a dividend yield of 3.6%. NBT Bancorp pays an annual dividend of $0.92 per share and has a dividend yield of 2.4%. United Bankshares pays out 69.5% of its earnings in the form of a dividend. NBT Bancorp pays out 49.5% 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.

Earnings and Valuation

This table compares United Bankshares and NBT Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
United Bankshares $537.56 million 7.18 $199.43 million $1.90 19.34
NBT Bancorp $359.49 million 4.55 $80.93 million $1.86 20.19

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

Profitability

This table compares United Bankshares and NBT Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
United Bankshares 25.20% 6.42% 1.00%
NBT Bancorp 19.68% 8.81% 0.91%

Risk and Volatility

United Bankshares has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, NBT Bancorp has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500.

Summary

United Bankshares beats NBT Bancorp on 11 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 NBT Bancorp

NBT Bancorp Inc. is a financial holding company. The Company conducts its business through NBT Bank, National Association (the Bank) and also through its other subsidiaries, which includes providing commercial banking and financial services to customers in its market area, including central and upstate New York, northeastern Pennsylvania, southern New Hampshire, western Massachusetts, Vermont and Portland, Maine area. The Bank is a commercial bank, which provides a range of financial products to individuals, corporations and municipalities. The Bank offers deposit products, which include demand deposit accounts, negotiable order of withdrawal accounts, money market deposit accounts and certificate of deposit accounts. It offers loan products, which include consumer loans, home equity loans, mortgages and commercial loans. The Bank offers other products and services, such as trust and investment services, and financial planning and life insurance services through its branch network.

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