Critical Comparison: Guaranty Bancshares (NASDAQ:GNTY) vs. UMB Financial (NASDAQ:UMBF)

UMB Financial (NASDAQ:UMBF) and Guaranty Bancshares (NASDAQ:GNTY) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, profitability, valuation, dividends, institutional ownership and earnings.

Profitability

This table compares UMB Financial and Guaranty Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UMB Financial	14.59%	14.30%	0.99%
Guaranty Bancshares	15.56%	8.69%	0.82%

Analyst Ratings

This is a summary of current recommendations for UMB Financial and Guaranty Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UMB Financial	0	1	4	1	3.00
Guaranty Bancshares	0	2	1	0	2.33

UMB Financial currently has a consensus target price of $93.67, suggesting a potential upside of 13.59%. Guaranty Bancshares has a consensus target price of $33.33, suggesting a potential upside of 9.29%. Given UMB Financial’s stronger consensus rating and higher possible upside, research analysts clearly believe UMB Financial is more favorable than Guaranty Bancshares.

Valuation and Earnings

This table compares UMB Financial and Guaranty Bancshares’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UMB Financial	$1.34 billion	2.99	$350.02 million	$7.53	10.95
Guaranty Bancshares	$179.01 million	1.96	$30.04 million	$2.44	12.50

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

Dividends

UMB Financial pays an annual dividend of $1.56 per share and has a dividend yield of 1.9%. Guaranty Bancshares pays an annual dividend of $0.96 per share and has a dividend yield of 3.1%. UMB Financial pays out 20.7% of its earnings in the form of a dividend. Guaranty Bancshares pays out 39.3% 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. UMB Financial has increased its dividend for 31 consecutive years.

Institutional and Insider Ownership

87.8% of UMB Financial shares are held by institutional investors. Comparatively, 39.4% of Guaranty Bancshares shares are held by institutional investors. 8.9% of UMB Financial shares are held by insiders. Comparatively, 26.4% of Guaranty Bancshares shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

UMB Financial has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500. Comparatively, Guaranty Bancshares has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500.

Summary

UMB Financial beats Guaranty Bancshares on 14 of the 18 factors compared between the two stocks.

About UMB Financial

UMB Financial Corporation operates as the bank holding company that provides banking services and asset servicing in the United States and internationally. The Commercial Banking segment provides commercial loans and credit card; commercial real estate financing; letters of credit; loan syndication, and consultative service; various business solutions including asset-based lending, mezzanine debt, and minority equity investment; and treasury management service, such as depository service, account reconciliation, cash management tool, accounts payable and receivable solution, electronic fund transfer and automated payment, controlled disbursement, lockbox service, and remote deposit capture service. The Institutional Banking segment offers fund, asset management, and healthcare service to institutional clients; and fund administration and accounting, investor service and transfer agency, mutual fund service, alternative investment service, fixed income sale, trading and underwriting, and corporate trust and escrow service, as well as institutional custody service. This segment also provides healthcare payment solution includes custodial service for health saving accounts and private label, multipurpose debit cards to insurance carriers, third-party administrator, software companies, employers, and financial institutions. The Personal Banking segment offers deposit account, retail credit card, private banking, installment loan, home equity line of credit, residential mortgage, as well as internet banking, ATM network, private banking, brokerage and insurance service, and investment advisory, custody, and trust services. It operates through a network of branches and offices. The company was founded in 1913 and is headquartered in Kansas City, Missouri.

About Guaranty Bancshares

Guaranty Bancshares, Inc. operates as the bank holding company for Guaranty Bank & Trust, N.A. that provides a range of commercial and consumer banking products and services for small- and medium-sized businesses, professionals, and individuals. The company offers checking and savings, money market, and business accounts, as well as certificates of deposit; and commercial and industrial, construction and development, 1-4 family residential, commercial real estate, farmland, agricultural, multi-family residential, and consumer loans. It also provides trustee, custodial and escrow, investment management, retirement plan, ATM, night depository, direct deposit, and cashier's check services, as well as online and mobile banking services; debit cards; letters of credit; and treasury management services, including wire transfer, positive pay, remote deposit capture, and automated clearinghouse services. Guaranty Bancshares, Inc. was founded in 1913 and is headquartered in Addison, Texas.