Contrasting Boston Private Financial (BPFH) and United Community Banks (UCBI)

Boston Private Financial (NASDAQ: BPFH) and United Community Banks (NASDAQ:UCBI) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, risk, institutional ownership, earnings and analyst recommendations.

Earnings & Valuation

This table compares Boston Private Financial and United Community Banks’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Boston Private Financial $412.66 million 3.25 $40.59 million $0.88 18.07
United Community Banks $477.98 million 5.08 $67.82 million $1.63 18.82

United Community Banks has higher revenue and earnings than Boston Private Financial. Boston Private Financial 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.

Insider and Institutional Ownership

93.5% of Boston Private Financial shares are owned by institutional investors. Comparatively, 88.4% of United Community Banks shares are owned by institutional investors. 2.1% of Boston Private Financial shares are owned by company insiders. Comparatively, 1.8% of United Community Banks shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Boston Private Financial pays an annual dividend of $0.48 per share and has a dividend yield of 3.0%. United Community Banks pays an annual dividend of $0.60 per share and has a dividend yield of 2.0%. Boston Private Financial pays out 54.5% of its earnings in the form of a dividend. United Community Banks pays out 36.8% 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.

Analyst Ratings

This is a breakdown of current ratings and target prices for Boston Private Financial and United Community Banks, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Boston Private Financial 0 5 0 0 2.00
United Community Banks 0 2 2 1 2.80

Boston Private Financial currently has a consensus price target of $16.40, suggesting a potential upside of 3.14%. United Community Banks has a consensus price target of $31.25, suggesting a potential upside of 1.89%. Given Boston Private Financial’s higher probable upside, research analysts clearly believe Boston Private Financial is more favorable than United Community Banks.

Profitability

This table compares Boston Private Financial and United Community Banks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Boston Private Financial 11.01% 10.85% 0.99%
United Community Banks 16.20% 10.49% 1.14%

Risk and Volatility

Boston Private Financial has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500. Comparatively, United Community Banks has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500.

Summary

United Community Banks beats Boston Private Financial on 11 of the 17 factors compared between the two stocks.

About Boston Private Financial

Boston Private Financial Holdings, Inc. operates as the bank holding company for Boston Private Bank & Trust Company that provides a range of banking services in the United States. The company operates through four segments: Private Banking, Wealth Management and Trust, Investment Management, and Wealth Advisory. The Private Banking segment offers private banking services to high net worth individuals, privately-owned businesses and partnerships, and nonprofit organizations; and financing services for affordable housing, first-time homebuyers, economic development, social services, community revitalization, and small businesses. It provides various deposit products. This segment also offers loans to individuals, such as residential mortgage loans, mortgage loans on investment or vacation properties, unsecured and secured personal lines of credits, home equity loans, and overdraft protection; and loans to businesses consisting of commercial and mortgage loans, revolving lines of credit, working capital loans, equipment financing, community lending programs, and construction and land loans. The Wealth Management and Trust segment provides wealth management solutions, including customized investment, wealth planning, trust, and family office services to high net worth individuals and families. The Investment Management segment offers services for pension funds, endowments, trusts, foundations and select institutions, mutual funds, and high net worth individuals and their families. The Wealth Advisory segment provides financial, estate and insurance, charitable, and intergenerational gifting and succession planning, as well as tax planning and preparation services. As of January 2, 2018, the company had offices in Boston, New York, Los Angeles, San Francisco, San Jose, Florida, and Wisconsin. Boston Private Financial Holdings, Inc. was incorporated in 1987 and is headquartered in Boston, Massachusetts.

About United Community Banks

United Community Banks, Inc. operates as the bank holding company for United Community Bank that provides retail and corporate banking services to individuals and businesses. It offers various deposit accounts, such as checking accounts, savings and time deposits accounts, NOW accounts, money market deposits, and certificates of deposit. The company also provides secured and unsecured loans that include commercial real estate, commercial and industrial, commercial construction, residential construction and mortgage, and indirect auto loans, as well as home equity lines of credits and fixed and adjustable-rate home mortgage loans. It also offers wire transfers, brokerage services, and other financial services, as well as risk management, payment processing, and merchant services. In addition, the company owns an insurance agency. As of December 31, 2017, it operated 156 locations in Georgia, North Carolina, South Carolina, and Tennessee. United Community Banks, Inc. was founded in 1950 and is based in Blairsville, Georgia.

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