Critical Contrast: Allegiance Bancshares (ABTX) vs. Union Bankshares (UBSH)

Allegiance Bancshares (NASDAQ:ABTX) and Union Bankshares (NASDAQ:UBSH) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, analyst recommendations, valuation, risk and dividends.

Profitability

This table compares Allegiance Bancshares and Union Bankshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Allegiance Bancshares 19.41% 10.35% 1.12%
Union Bankshares 20.38% 9.36% 1.27%

Risk and Volatility

Allegiance Bancshares has a beta of 1.64, suggesting that its stock price is 64% more volatile than the S&P 500. Comparatively, Union Bankshares has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Allegiance Bancshares and Union Bankshares, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allegiance Bancshares 0 0 0 1 4.00
Union Bankshares 0 1 4 1 3.00

Allegiance Bancshares presently has a consensus price target of $43.50, suggesting a potential upside of 24.29%. Union Bankshares has a consensus price target of $43.83, suggesting a potential upside of 34.75%. Given Union Bankshares’ higher probable upside, analysts clearly believe Union Bankshares is more favorable than Allegiance Bancshares.

Insider & Institutional Ownership

29.0% of Allegiance Bancshares shares are owned by institutional investors. Comparatively, 77.5% of Union Bankshares shares are owned by institutional investors. 12.7% of Allegiance Bancshares shares are owned by insiders. Comparatively, 2.2% of Union Bankshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Union Bankshares pays an annual dividend of $0.92 per share and has a dividend yield of 2.8%. Allegiance Bancshares does not pay a dividend. Union Bankshares pays out 48.2% of its earnings in the form of a dividend. Union Bankshares has increased its dividend for 6 consecutive years.

Earnings and Valuation

This table compares Allegiance Bancshares and Union Bankshares’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Allegiance Bancshares $125.30 million 6.10 $17.63 million $1.58 22.15
Union Bankshares $401.87 million 5.34 $72.92 million $1.91 17.03

Union Bankshares has higher revenue and earnings than Allegiance Bancshares. Union Bankshares is trading at a lower price-to-earnings ratio than Allegiance Bancshares, indicating that it is currently the more affordable of the two stocks.

Summary

Union Bankshares beats Allegiance Bancshares on 10 of the 17 factors compared between the two stocks.

About Allegiance Bancshares

Allegiance Bancshares, Inc. operates as the bank holding company for Allegiance Bank that provides a range of commercial banking services primarily to small and medium-sized businesses, professionals, and individual customers. It accepts deposit products, including checking accounts, commercial accounts, savings accounts, and other time deposits comprising money market accounts and certificates of deposit. The company also grants various loan products, such as commercial and industrial loans; mortgage warehouse loans; commercial real estate loans, including multi-family residential loans; commercial real estate construction and land development loans; residential real estate loans, such as 1-4 family residential mortgage loans; residential construction loans; and consumer and other loans. In addition, it offers automated teller machines, drive-through services, and 24-hour depository facilities; mobile banking; and telephone, mail, and Internet banking services. Further, the company provides safe deposit boxes, debit cards, cash management and wire transfer services, night depository services, direct deposits, cashier's checks, and letters of credit. As of January 25, 2018, it operated 16 full-service banking locations and a loan production office in the Houston metropolitan area. The company was founded in 2007 and is headquartered in Houston, Texas.

About Union Bankshares

Union Bankshares Corporation operates as the bank holding company for Union Bank & Trust that provides banking and related financial services to consumers and businesses. The company operates in two segments, Community Bank and Mortgage. It accepts various deposit products, including checking, savings, NOW, time deposit, and money market accounts, as well as certificates of deposit and other depository services. The company also offers loans for commercial, industrial, residential mortgage, and consumer purposes. In addition, it provides credit cards, automated teller machine (ATM) services, mobile and Internet banking services, and online bill payment services, as well as asset management, private banking, and trust services to individuals and corporations. Further, the company offers securities, brokerage, and investment advisory services; and originates and sells mortgage loan products in the secondary market principally in Virginia, North Carolina, Maryland, and the Washington D.C. metro area. As of January 1, 2018, it operated 150 branches and approximately 220 ATMs in Virginia. The company was formerly known as Union First Market Bankshares Corporation and changed its name to Union Bankshares Corporation in April 2014. Union Bankshares Corporation was founded in 1902 and is headquartered in Richmond, Virginia.

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