Union Bankshares Corporation (NASDAQ: UBSH) and Webster Financial Corporation (NYSE:WBS) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, profitability and institutional ownership.
Earnings & Valuation
This table compares Union Bankshares Corporation and Webster Financial Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Union Bankshares Corporation||$365.83 million||4.18||$77.47 million||$1.80||19.45|
|Webster Financial Corporation||$1.09 billion||4.49||$207.12 million||$2.54||20.88|
Risk & Volatility
Union Bankshares Corporation has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500. Comparatively, Webster Financial Corporation has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500.
Union Bankshares Corporation pays an annual dividend of $0.84 per share and has a dividend yield of 2.4%. Webster Financial Corporation pays an annual dividend of $1.04 per share and has a dividend yield of 2.0%. Union Bankshares Corporation pays out 46.7% of its earnings in the form of a dividend. Webster Financial Corporation pays out 40.9% 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. Webster Financial Corporation has raised its dividend for 6 consecutive years.
This is a summary of current recommendations for Union Bankshares Corporation and Webster Financial Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Union Bankshares Corporation||0||1||2||1||3.00|
|Webster Financial Corporation||1||6||2||0||2.11|
Union Bankshares Corporation currently has a consensus price target of $38.50, indicating a potential upside of 9.97%. Webster Financial Corporation has a consensus price target of $54.88, indicating a potential upside of 3.48%. Given Union Bankshares Corporation’s stronger consensus rating and higher possible upside, equities analysts plainly believe Union Bankshares Corporation is more favorable than Webster Financial Corporation.
Insider & Institutional Ownership
64.9% of Union Bankshares Corporation shares are owned by institutional investors. Comparatively, 93.7% of Webster Financial Corporation shares are owned by institutional investors. 2.2% of Union Bankshares Corporation shares are owned by company insiders. Comparatively, 2.2% of Webster Financial Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
This table compares Union Bankshares Corporation and Webster Financial Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Union Bankshares Corporation||20.02%||7.98%||0.93%|
|Webster Financial Corporation||21.09%||9.89%||0.93%|
Webster Financial Corporation beats Union Bankshares Corporation on 11 of the 16 factors compared between the two stocks.
About Union Bankshares Corporation
Union Bankshares Corporation is a financial holding company and bank holding company. The Company operates through two segments: a community bank segment and mortgage loan origination business segment. The Company offers financial services through its community bank subsidiary, Union Bank & Trust (the Bank) and three non-bank financial services affiliates. The Company’s non-bank financial services affiliates include Union Mortgage Group, Inc. (UMG), Union Insurance Group, LLC and Old Dominion Capital Management, Inc. The community bank segment included one subsidiary bank, which provided loan, deposit, investment, and trust services to retail and commercial customers throughout its 114 retail locations in Virginia, as of December 31, 2016. The mortgage segment includes UMG, which provides a range of mortgage loan products principally in Virginia, North Carolina, Maryland, and the Washington D.C. metro area.
About Webster Financial Corporation
Webster Financial Corporation is a bank and financial holding company. The Company’s segments include Commercial Banking, Community Banking, HSA Bank, Private Banking, and Corporate and Reconciling. The Commercial Banking segment includes middle-market, asset-based lending, commercial real estate, equipment finance, and treasury and payment solutions, which includes government and institutional banking. The Community Banking segment consists of its Personal Banking and Business Banking segments. HSA Bank, a division of its subsidiary, Webster Bank, National Association, offers health savings accounts, health reimbursement accounts, flexible spending accounts, and other financial solutions. Private Banking serves high-net-worth clients, not-for-profit organizations, and business clients with asset management, trust, loan and deposit products, and financial planning services. Its treasury unit and consumer-liquidating portfolio are included in the Corporate and Reconciling segment.
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