Comparing M&F Bancorp (OTCMKTS:MFBP) & United Community Banks (NASDAQ:UCB)

United Community Banks (NASDAQ:UCB) and M&F Bancorp (OTCMKTS:MFBP) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Profitability

This table compares United Community Banks and M&F Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Community Banks	16.48%	8.64%	1.04%
M&F Bancorp	N/A	N/A	N/A

Volatility & Risk

United Community Banks has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500. Comparatively, M&F Bancorp has a beta of -0.45, meaning that its stock price is 145% less volatile than the S&P 500.

Dividends

United Community Banks pays an annual dividend of $0.96 per share and has a dividend yield of 3.4%. M&F Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.3%. United Community Banks pays out 45.5% of its earnings in the form of a dividend.

Institutional and Insider Ownership

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

Earnings and Valuation

This table compares United Community Banks and M&F Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Community Banks	$938.98 million	3.61	$252.40 million	$2.11	13.22
M&F Bancorp	$29.33 million	1.27	$4.77 million	N/A	N/A

United Community Banks has higher revenue and earnings than M&F Bancorp.

Analyst Ratings

This is a summary of recent recommendations for United Community Banks and M&F Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Community Banks	0	3	4	0	2.57
M&F Bancorp	0	0	0	0	0.00

United Community Banks currently has a consensus target price of $33.14, suggesting a potential upside of 18.83%. Given United Community Banks’ stronger consensus rating and higher probable upside, research analysts plainly believe United Community Banks is more favorable than M&F Bancorp.

Summary

United Community Banks beats M&F Bancorp on 12 of the 14 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. It accepts various deposit products, including checking, savings, money market, and other deposit accounts. The company 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, it originates loans partially guaranteed by the SBA and USDA loan programs. Further, the company 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, it offers reinsurance on a property insurance contract; insurance agency services; treasury management; credit cards; payment and commerce solution, equipment finance, investment advisory, and other related financial services; brokerage services; and payment processing, merchant, wire transfer, private banking, and other related financial services. The company was founded in 1950 and is headquartered in Blairsville, Georgia.

About M&F Bancorp

M&F Bancorp, Inc. operates as a bank holding company for the Mechanics and Farmers Bank that provides consumer and commercial banking products and services in North Carolina. It offers deposit products, including demand deposits; checking, savings, and money market accounts, as well as certificates of deposit. The company provides loans for commercial and residential real estate, and construction; and consumer and other loans; as well as ATM services. M&F Bancorp, Inc. was founded in 1907 and is headquartered in Durham, North Carolina.