Analyzing Dime Community Bancshares (NASDAQ:DCOM) and United Bankshares (NASDAQ:UBSI)

Dime Community Bancshares (NASDAQ:DCOM) and United Bankshares (NASDAQ:UBSI) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Volatility & Risk

Dime Community Bancshares has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500. Comparatively, United Bankshares has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.

Insider and Institutional Ownership

75.3% of Dime Community Bancshares shares are held by institutional investors. Comparatively, 70.8% of United Bankshares shares are held by institutional investors. 7.1% of Dime Community Bancshares shares are held by company insiders. Comparatively, 3.5% of United Bankshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for Dime Community Bancshares and United Bankshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dime Community Bancshares	0	3	2	0	2.40
United Bankshares	0	2	2	1	2.80

Dime Community Bancshares presently has a consensus price target of $38.33, indicating a potential upside of 14.98%. United Bankshares has a consensus price target of $44.67, indicating a potential upside of 2.49%. Given Dime Community Bancshares’ higher probable upside, analysts clearly believe Dime Community Bancshares is more favorable than United Bankshares.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Dime Community Bancshares	15.15%	9.12%	0.83%
United Bankshares	25.51%	8.60%	1.40%

Dividends

Dime Community Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 3.0%. United Bankshares pays an annual dividend of $1.52 per share and has a dividend yield of 3.5%. Dime Community Bancshares pays out 42.4% of its earnings in the form of a dividend. United Bankshares pays out 46.5% 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. Dime Community Bancshares has increased its dividend for 2 consecutive years and United Bankshares has increased its dividend for 26 consecutive years. United Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Dime Community Bancshares and United Bankshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dime Community Bancshares	$730.38 million	2.00	$110.68 million	$2.36	14.13
United Bankshares	$1.82 billion	3.36	$464.60 million	$3.27	13.33

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

Summary

United Bankshares beats Dime Community Bancshares on 10 of the 17 factors compared between the two stocks.

About Dime Community Bancshares

Dime Community Bancshares, Inc. operates as the holding company for Dime Community Bank that engages in the provision of various commercial banking and financial services. The company accepts time, savings, and demand deposits from the businesses, consumers, and local municipalities. It also offers commercial real estate loans; multi-family mortgage loans; residential mortgage loans; letters of credit; secured and unsecured commercial and consumer loans; lines of credit; home equity loans; and construction and land loans. In addition, the company invests in Federal Home Loan Bank, Federal National Mortgage Association, Government National Mortgage Association, and Federal Home Loan Mortgage Corporation mortgage-backed securities, collateralized mortgage obligations, and other asset backed securities; U.S. Treasury securities; New York state and local municipal obligations; U.S. government-sponsored enterprise securities; and corporate bonds. Further, it offers certificate of deposit account registry services and insured cash sweep programs; federal deposit insurance corporation insurance; merchant credit and debit card processing, automated teller machines, cash management services, lockbox processing, online banking services, remote deposit capture, safe deposit boxes, and individual retirement accounts; investment products and services through a third-party broker dealer; and title insurance broker services for small and medium sized businesses, and municipal and consumer relationships. The company was founded in 1910 and is headquartered in Hauppauge, New York.

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.