UMB Financial (NASDAQ:UMBF) vs. Sierra Bancorp (NASDAQ:BSRR) Financial Survey

Sierra Bancorp (NASDAQ:BSRR) and UMB Financial (NASDAQ:UMBF) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.

Insider and Institutional Ownership

55.4% of Sierra Bancorp shares are held by institutional investors. Comparatively, 87.8% of UMB Financial shares are held by institutional investors. 11.8% of Sierra Bancorp shares are held by insiders. Comparatively, 5.3% of UMB Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Sierra Bancorp has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, UMB Financial has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.

Profitability

This table compares Sierra Bancorp and UMB Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sierra Bancorp	22.37%	12.38%	1.20%
UMB Financial	21.64%	13.41%	1.38%

Dividends

Sierra Bancorp pays an annual dividend of $1.08 per share and has a dividend yield of 2.7%. UMB Financial pays an annual dividend of $2.00 per share and has a dividend yield of 1.5%. Sierra Bancorp pays out 31.6% of its earnings in the form of a dividend. UMB Financial pays out 16.7% 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. Sierra Bancorp has increased its dividend for 2 consecutive years and UMB Financial has increased its dividend for 32 consecutive years.

Valuation and Earnings

This table compares Sierra Bancorp and UMB Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sierra Bancorp	$201.98 million	2.58	$42.33 million	$3.42	11.75
UMB Financial	$4.14 billion	2.47	$702.40 million	$12.01	11.20

UMB Financial has higher revenue and earnings than Sierra Bancorp. UMB Financial is trading at a lower price-to-earnings ratio than Sierra Bancorp, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Sierra Bancorp and UMB Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sierra Bancorp	0	3	2	0	2.40
UMB Financial	0	4	11	1	2.81

Sierra Bancorp currently has a consensus target price of $38.67, indicating a potential downside of 3.79%. UMB Financial has a consensus target price of $167.93, indicating a potential upside of 24.84%. Given UMB Financial’s stronger consensus rating and higher probable upside, analysts plainly believe UMB Financial is more favorable than Sierra Bancorp.

Summary

UMB Financial beats Sierra Bancorp on 13 of the 18 factors compared between the two stocks.

About Sierra Bancorp

Sierra Bancorp operates as the bank holding company for Bank of the Sierra that provides retail and commercial banking services to individuals and businesses in California. It accepts various deposit products, such as checking accounts, savings accounts, money market demand accounts, time deposits, retirement accounts, and sweep accounts. The company's loan products include agricultural, commercial, consumer, real estate, construction, and mortgage loans. It also offers automated teller machines; electronic point-of-sale payment alternatives; online and automated telephone banking services; and remote deposit capture and automated payroll services for business customers. Sierra Bancorp was founded in 1977 and is headquartered in Porterville, California.

About UMB Financial

UMB Financial Corporation operates as the bank holding company that provides banking services and asset servicing in the United States and internationally. The Commercial Banking segment provides commercial loans and credit card; commercial real estate financing; letters of credit; loan syndication, and consultative service; various business solutions including asset-based lending, mezzanine debt, and minority equity investment; and treasury management service, such as depository service, account reconciliation, cash management tool, accounts payable and receivable solution, electronic fund transfer and automated payment, controlled disbursement, lockbox service, and remote deposit capture service. The Institutional Banking segment offers fund, asset management, and healthcare service to institutional clients; and fund administration and accounting, investor service and transfer agency, mutual fund service, alternative investment service, fixed income sale, trading and underwriting, and corporate trust and escrow service, as well as institutional custody service. This segment also provides healthcare payment solution includes custodial service for health saving accounts and private label, multipurpose debit cards to insurance carriers, third-party administrator, software companies, employers, and financial institutions. The Personal Banking segment offers deposit account, retail credit card, private banking, installment loan, home equity line of credit, residential mortgage, as well as internet banking, ATM network, private banking, brokerage and insurance service, and investment advisory, custody, and trust services. It operates through a network of branches and offices. The company was founded in 1913 and is headquartered in Kansas City, Missouri.