United Community Banks (NASDAQ: UCBI) and Salisbury Bancorp (NASDAQ:SAL) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.
Institutional and Insider Ownership
87.7% of United Community Banks shares are held by institutional investors. Comparatively, 9.9% of Salisbury Bancorp shares are held by institutional investors. 2.2% of United Community Banks shares are held by company insiders. Comparatively, 19.1% of Salisbury Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
United Community Banks pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. Salisbury Bancorp pays an annual dividend of $1.12 per share and has a dividend yield of 2.5%. United Community Banks pays out 27.0% of its earnings in the form of a dividend. Salisbury Bancorp pays out 46.7% 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.
This table compares United Community Banks and Salisbury Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|United Community Banks||23.09%||10.31%||1.08%|
Valuation and Earnings
This table compares United Community Banks and Salisbury Bancorp’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|United Community Banks||$428.72 million||5.28||$100.65 million||$1.48||20.85|
|Salisbury Bancorp||$42.35 million||3.00||$6.68 million||$2.40||19.00|
United Community Banks has higher revenue and earnings than Salisbury Bancorp. Salisbury Bancorp 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.
This is a breakdown of recent ratings for United Community Banks and Salisbury Bancorp, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|United Community Banks||0||2||3||1||2.83|
United Community Banks currently has a consensus target price of $31.00, indicating a potential upside of 0.45%. Salisbury Bancorp has a consensus target price of $51.00, indicating a potential upside of 11.87%. Given Salisbury Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Salisbury Bancorp is more favorable than United Community Banks.
Risk and Volatility
United Community Banks has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, Salisbury Bancorp has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500.
United Community Banks beats Salisbury Bancorp on 12 of the 17 factors compared between the two stocks.
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.
Salisbury Bancorp Company Profile
Salisbury Bancorp, Inc. is a bank holding company for Salisbury Bank and Trust Company (the Bank). The Bank is a Connecticut-chartered and Federal Deposit Insurance Corporation (the FDIC) insured commercial bank. The Bank provides commercial banking, consumer financing, retail banking and trust and wealth advisory services through a network of over 10 banking offices and approximately nine automated teller machines (ATMs). The Bank originates commercial loans, commercial real estate loans, residential and commercial construction loans, residential real estate loans collateralized by one- to four- family residences, home equity lines of credit, fixed rate loans and other consumer loans. The Bank’s securities portfolio include the United States Government and Agency securities, mortgage-backed securities, collateralized mortgage obligations and tax exempt municipal bonds. The Bank uses deposits, repayments and sales, and borrowings to fund lending, investing and general operations.
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