Reviewing United Community Banks (NYSE:UCB) & Texas Community Bancshares (NASDAQ:TCBS)

United Community Banks (NYSE:UCB) and Texas Community Bancshares (NASDAQ:TCBS) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, earnings, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of recent ratings for United Community Banks and Texas Community Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Community Banks	0	4	3	0	2.43
Texas Community Bancshares	0	1	0	0	2.00

United Community Banks presently has a consensus target price of $35.33, indicating a potential upside of 8.89%. Given United Community Banks’ stronger consensus rating and higher possible upside, analysts clearly believe United Community Banks is more favorable than Texas Community Bancshares.

Valuation & Earnings

This table compares United Community Banks and Texas Community Bancshares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Community Banks	$1.50 billion	2.63	$252.40 million	$2.52	12.88
Texas Community Bancshares	$20.55 million	2.30	-$1.30 million	$0.85	19.11

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

Institutional and Insider Ownership

82.3% of United Community Banks shares are owned by institutional investors. Comparatively, 15.8% of Texas Community Bancshares shares are owned by institutional investors. 0.4% of United Community Banks shares are owned by company insiders. Comparatively, 19.5% of Texas Community Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

United Community Banks pays an annual dividend of $1.00 per share and has a dividend yield of 3.1%. Texas Community Bancshares pays an annual dividend of $0.20 per share and has a dividend yield of 1.2%. United Community Banks pays out 39.7% of its earnings in the form of a dividend. Texas Community Bancshares pays out 23.5% 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. Texas Community Bancshares has raised its dividend for 1 consecutive years.

Volatility & Risk

United Community Banks has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, Texas Community Bancshares has a beta of 0.06, indicating that its share price is 94% less volatile than the S&P 500.

Profitability

This table compares United Community Banks and Texas Community Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Community Banks	20.67%	9.42%	1.17%
Texas Community Bancshares	9.98%	4.77%	0.57%

Summary

United Community Banks beats Texas Community Bancshares on 13 of the 17 factors compared between the two stocks.

About United Community Banks

United Community Banks, Inc. operates as the financial holding company for United Community Bank that provides financial products and services to commercial, retail, government, education, energy, health care, and real estate sectors. The company accepts various deposit products, including checking, savings, money market, and other deposit accounts. It also offers lending services, including real estate, consumer, and commercial loans, to individuals, small businesses, mid-sized commercial businesses, and non-profit organizations, as well as secured and unsecured, and mortgage loans. In addition, the company originate loans partially guaranteed by the SBA and USDA loan programs. Further, it provides wealth management services comprising financial planning, customized portfolio management, and investment advice; trust services to manage fiduciary assets; non-deposit investment products; and insurance products, including life insurance, long-term care insurance, and tax-deferred annuities, as well as invests in residential and commercial mortgage-backed securities, asset-backed securities, the U.S. treasury, the U.S. agency, and municipal obligations. Additionally, the company offers reinsurance on a property insurance contract; insurance agency services; brokerage services; and payment processing, merchant, wire transfer, private banking, and other related financial services. It operates through a network of 171 branches in Florida, Georgia, North Carolina, South Carolina, and Tennessee. United Community Banks, Inc. was founded in 1950 and is headquartered in Blairsville, Georgia.

About Texas Community Bancshares

Texas Community Bancshares, Inc. operates as the bank holding company for Mineola Community Bank, S.S.B. that provides loans and banking services to consumers and commercial customers in Mineola, Texas and the surrounding area, and the Dallas Fort Worth Metroplex. It generates a selection of deposit accounts, including savings accounts, checking accounts, certificates of deposit, and individual retirement accounts. The company also originates primarily one- to four-family residential mortgage loans, commercial real estate loans, and construction and land loans; and car, boat, share, unsecured loans, etc., as well as agricultural loans, commercial loans, and consumer and other loans. In addition, it invests in securities; and offers sweep account, safe deposit boxes, e-statement, cards, online banking, and mobile banking services. Texas Community Bancshares, Inc. was founded in 1934 and is headquartered in Mineola, Texas.