Head-To-Head Survey: BancorpSouth Bank (BXS) & United Community Financial (UCFC)

BancorpSouth Bank (NYSE: BXS) and United Community Financial (NASDAQ:UCFC) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, dividends, valuation, analyst recommendations, earnings and institutional ownership.

Profitability

This table compares BancorpSouth Bank and United Community Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BancorpSouth Bank 19.59% 9.01% 1.03%
United Community Financial 18.34% 9.99% 1.11%

Valuation and Earnings

This table compares BancorpSouth Bank and United Community Financial’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BancorpSouth Bank $781.02 million 3.78 $153.03 million $1.66 19.70
United Community Financial $118.75 million 4.01 $21.78 million $0.43 22.23

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

Dividends

BancorpSouth Bank pays an annual dividend of $0.56 per share and has a dividend yield of 1.7%. United Community Financial pays an annual dividend of $0.24 per share and has a dividend yield of 2.5%. BancorpSouth Bank pays out 33.7% of its earnings in the form of a dividend. United Community Financial pays out 55.8% 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. BancorpSouth Bank has raised its dividend for 5 consecutive years.

Volatility and Risk

BancorpSouth Bank has a beta of 1.46, suggesting that its stock price is 46% more volatile than the S&P 500. Comparatively, United Community Financial has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for BancorpSouth Bank and United Community Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BancorpSouth Bank 0 7 1 0 2.13
United Community Financial 0 1 1 0 2.50

BancorpSouth Bank currently has a consensus target price of $34.14, indicating a potential upside of 4.41%. United Community Financial has a consensus target price of $10.50, indicating a potential upside of 9.83%. Given United Community Financial’s stronger consensus rating and higher probable upside, analysts plainly believe United Community Financial is more favorable than BancorpSouth Bank.

Institutional & Insider Ownership

66.2% of BancorpSouth Bank shares are held by institutional investors. Comparatively, 60.1% of United Community Financial shares are held by institutional investors. 2.6% of BancorpSouth Bank shares are held by insiders. Comparatively, 3.6% of United Community Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

BancorpSouth Bank Company Profile

BancorpSouth Bank is a financial holding company. The Company, through its principal bank subsidiary, conducts commercial banking and financial services operations in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee, Texas and Illinois. The Company’s segments include Community Banking, Insurance Agencies, and General Corporate and Other. Its Community Banking segment provides a range of deposit products, commercial loans and consumer loans. Its Insurance Agencies segment serves as agents in the sale of commercial lines of insurance and full lines of property and casualty, life, health and employee benefits products and services. Its General Corporate and Other segment includes mortgage banking, trust services, credit card activities, investment services and other activities not allocated to the Community Banking or Insurance Agencies segments.

United Community Financial Company Profile

United Community Financial Corp. is financial services holding company. The Company’s subsidiaries include The Home Savings and Loan Company of Youngstown, Ohio (Home Savings or the Bank), HSB Insurance, LLC and HSB Capital, LLC. The principal business of Home Savings is the origination of mortgage loans, including construction loans, on residential and nonresidential real estate located in Home Savings’ primary market area. In addition to real estate lending, Home Savings originates commercial loans and various types of consumer loans. Funds for lending and other investment activities are obtained primarily from retail deposits. HSB Insurance, LLC is an insurance agency that offers a range of insurance products for business and residential customers, which include, auto, homeowners, life-health, commercial, surety bonds and aviation. HSB Capital, LLC provides mezzanine funding for customers. Mezzanine loans are offered to customers in United Community’s market area.

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