United Community Banks (NYSE:UCB) and National Bank (NYSE:NBHC) Critical Contrast

United Community Banks (NYSE:UCB) and National Bank (NYSE:NBHC) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.

Analyst Ratings

This is a summary of recent recommendations for United Community Banks and National Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Community Banks	0	3	3	1	2.71
National Bank	0	3	3	0	2.50

United Community Banks currently has a consensus target price of $38.00, suggesting a potential upside of 18.49%. National Bank has a consensus target price of $45.25, suggesting a potential upside of 11.34%. Given United Community Banks’ stronger consensus rating and higher probable upside, equities analysts plainly believe United Community Banks is more favorable than National Bank.

Valuation and Earnings

This table compares United Community Banks and National Bank”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Community Banks	$1.54 billion	2.50	$328.10 million	$2.61	12.29
National Bank	$587.34 million	2.62	$109.57 million	$2.85	14.26

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

Dividends

United Community Banks pays an annual dividend of $1.00 per share and has a dividend yield of 3.1%. National Bank pays an annual dividend of $1.28 per share and has a dividend yield of 3.1%. United Community Banks pays out 38.3% of its earnings in the form of a dividend. National Bank pays out 44.9% 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. National Bank has increased its dividend for 10 consecutive years. National Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

United Community Banks has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500. Comparatively, National Bank has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500.

Insider and Institutional Ownership

82.3% of United Community Banks shares are owned by institutional investors. Comparatively, 92.7% of National Bank shares are owned by institutional investors. 0.4% of United Community Banks shares are owned by insiders. Comparatively, 2.9% of National Bank shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares United Community Banks and National Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Community Banks	21.35%	9.49%	1.20%
National Bank	18.66%	8.65%	1.17%

Summary

United Community Banks beats National Bank on 10 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 National Bank

National Bank Holdings Corporation operates as the bank holding company for NBH Bank that provides various banking products and financial services to commercial, business, and consumer clients in the United States. It offers deposit products, including checking, savings, money market, and other deposit accounts, including fixed-rate and fixed maturity time deposits. The company also provides commercial and industrial loans and leases, such as working capital loans, equipment loans, lender finance loans, food and agriculture loans, government and non-profit loans, owner occupied commercial real estate loans, and other commercial loans and leases; non-owner occupied commercial real estate loans consisting of loans on commercial properties, such as office buildings, warehouse/distribution buildings, multi-family, hospitality, and retail buildings; small business administration loans to support small businesses and entrepreneurs; term loans, line of credits, and real estate secured loans; residential real estate loans; and consumer loans. In addition, it offers treasury management solutions comprising online and mobile banking, commercial credit card, wire transfer, automated clearing house, electronic bill payment, lock box, remote deposit capture, merchant processing, cash vault, controlled disbursements, and fraud prevention services, as well as other auxiliary services, including account reconciliation, collections, repurchase accounts, zero balance accounts, and sweep accounts. The company operates through a network of banking centers located in Colorado, the greater Kansas City region, New Mexico, Utah, Wyoming, Idaho, and Texas. It also operates ATMs. The company was formerly known as NBH Holdings Corp. and changed its name to National Bank Holdings Corporation in March 2012. The company was incorporated in 2009 and is headquartered in Greenwood Village, Colorado.