First Mid-Illinois Bancshares (NASDAQ: FMBH) and United Community Banks (NASDAQ:UCBI) are both financials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, valuation, risk, institutional ownership, profitability and dividends.
Risk and Volatility
First Mid-Illinois Bancshares has a beta of 0.08, suggesting that its stock price is 92% less volatile than the S&P 500. Comparatively, United Community Banks has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500.
21.3% of First Mid-Illinois Bancshares shares are held by institutional investors. Comparatively, 83.1% of United Community Banks shares are held by institutional investors. 20.3% of First Mid-Illinois Bancshares shares are held by company insiders. Comparatively, 2.2% of United Community Banks shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
First Mid-Illinois Bancshares pays an annual dividend of $0.68 per share and has a dividend yield of 1.9%. United Community Banks pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. First Mid-Illinois Bancshares pays out 31.9% of its earnings in the form of a dividend. United Community Banks pays out 42.6% 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. First Mid-Illinois Bancshares is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares First Mid-Illinois Bancshares and United Community Banks’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|First Mid-Illinois Bancshares||20.54%||9.33%||0.99%|
|United Community Banks||14.14%||10.12%||1.08%|
This is a breakdown of recent recommendations for First Mid-Illinois Bancshares and United Community Banks, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|First Mid-Illinois Bancshares||0||0||1||0||3.00|
|United Community Banks||0||1||4||1||3.00|
First Mid-Illinois Bancshares currently has a consensus price target of $37.00, suggesting a potential upside of 4.46%. United Community Banks has a consensus price target of $31.00, suggesting a potential downside of 2.05%. Given First Mid-Illinois Bancshares’ higher possible upside, equities analysts plainly believe First Mid-Illinois Bancshares is more favorable than United Community Banks.
Valuation and Earnings
This table compares First Mid-Illinois Bancshares and United Community Banks’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|First Mid-Illinois Bancshares||$129.89 million||3.45||$26.68 million||$2.13||16.63|
|United Community Banks||$477.98 million||5.24||$67.82 million||$0.94||33.67|
United Community Banks has higher revenue and earnings than First Mid-Illinois Bancshares. First Mid-Illinois Bancshares is trading at a lower price-to-earnings ratio than United Community Banks, indicating that it is currently the more affordable of the two stocks.
United Community Banks beats First Mid-Illinois Bancshares on 10 of the 16 factors compared between the two stocks.
First Mid-Illinois Bancshares Company Profile
First Mid-Illinois Bancshares, Inc. is a financial holding company. The Company is engaged in the business of banking through its subsidiaries, First Mid-Illinois Bank & Trust, N.A. (First Mid Bank) and First Clover Leaf Bank, N.A. (First Clover Leaf Bank). The Company provides data processing services to affiliates through another subsidiary, Mid-Illinois Data Services, Inc. (MIDS). The Company offers insurance products and services to customers through its subsidiary, The Checkley Agency, Inc., doing business as First Mid Insurance Group (First Mid Insurance). The Company also owns three statutory business trusts, First Mid-Illinois Statutory Trust I (First Mid Trust I), and First Mid-Illinois Statutory Trust II (First Mid Trust II), and Clover Leaf Statutory Trust I (CLST Trust). As of December 31, 2016, the Company operated in three primary lines of business: community banking, wealth management, and insurance brokerage.
United Community Banks Company Profile
United Community Banks, Inc. (United) is a bank holding company. United conducts its operations through a community-focused operating model of separate community banks, which, as of December 31, 2016, operated at 139 locations throughout the Atlanta-Sandy Springs-Roswell, Georgia, and Gainesville, Georgia metropolitan statistical areas, upstate and coastal South Carolina, north and coastal Georgia, western North Carolina, and east Tennessee. The community banks offer a range of retail and corporate banking services, including checking, savings and time deposit accounts, secured and unsecured loans, wire transfers, brokerage services and other financial services. The Company operates through its subsidiary, United Community Bank, Blairsville, Georgia (the Bank) and Four Oaks Bank & Trust Company. The Bank owns an insurance agency, United Community Insurance Services, Inc., known as United Community Advisory Services, which is a subsidiary of the Bank.
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