Reviewing Union Bankshares (NASDAQ:UNB) & Commerce Bancshares (NASDAQ:CBSH)

Union Bankshares (NASDAQ:UNB) and Commerce Bancshares (NASDAQ:CBSH) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.

Valuation and Earnings

This table compares Union Bankshares and Commerce Bancshares’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Union Bankshares	$67.01 million	1.46	$11.26 million	$2.37	9.14
Commerce Bancshares	$1.95 billion	3.68	$477.06 million	$3.59	15.47

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

Dividends

Union Bankshares pays an annual dividend of $1.44 per share and has a dividend yield of 6.7%. Commerce Bancshares pays an annual dividend of $1.08 per share and has a dividend yield of 1.9%. Union Bankshares pays out 60.8% of its earnings in the form of a dividend. Commerce Bancshares pays out 30.1% 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. Union Bankshares has increased its dividend for 11 consecutive years and Commerce Bancshares has increased its dividend for 56 consecutive years.

Insider & Institutional Ownership

14.8% of Union Bankshares shares are held by institutional investors. Comparatively, 70.3% of Commerce Bancshares shares are held by institutional investors. 1.1% of Union Bankshares shares are held by company insiders. Comparatively, 3.1% of Commerce Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Union Bankshares has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500. Comparatively, Commerce Bancshares has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Union Bankshares and Commerce Bancshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Union Bankshares	0	0	0	0	N/A
Commerce Bancshares	0	6	1	0	2.14

Commerce Bancshares has a consensus price target of $56.71, indicating a potential upside of 2.24%. Given Commerce Bancshares’ higher possible upside, analysts clearly believe Commerce Bancshares is more favorable than Union Bankshares.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Union Bankshares	15.19%	17.85%	0.76%
Commerce Bancshares	23.33%	16.78%	1.49%

Summary

Commerce Bancshares beats Union Bankshares on 13 of the 16 factors compared between the two stocks.

About Union Bankshares

Union Bankshares, Inc. operates as the bank holding company for Union Bank that provides retail, commercial, and municipal banking products and services in northern Vermont and New Hampshire. It offers retail depository services, such as personal checking, savings, money market, IRA/SEP/KEOGH, and health savings accounts, as well as certificates of deposit. The company also provides commercial real estate loans; commercial loans for plant and equipment, working capital, real estate renovation, and other business purposes to business owners and investors; small business administration guaranteed loans; residential construction and mortgage loans; municipal financing, including loans and excess deposits secured by FHLBB letters of credit; and home improvement loans and overdraft checking privileges against preauthorized lines of credit. In addition, it offers online cash management services, including account reconciliation, credit card depository, automated clearing house origination, wire transfers, positive pay and night depository services; merchant credit card services for the deposit and immediate credit of sales drafts; remote deposit capture services; and online mortgage application and consumer deposit account opening services. Further, the company provides business checking accounts; standby letters of credit, bank checks or money orders, and safe deposit boxes; ATM cards and services; debit cards; telephone, internet, and mobile banking services, including bill pay; and wealth management, fiduciary, and trust services. It offers retail banking services to individuals; and commercial banking services to small and medium sized business corporations, limited liability companies, partnerships, and sole proprietorships, as well as nonprofit organizations, local municipalities, and school districts. Union Bankshares, Inc. was founded in 1891 and is headquartered in Morrisville, Vermont.

About Commerce Bancshares

Commerce Bancshares, Inc. operates as the bank holding company for Commerce Bank that provides retail, mortgage banking, corporate, investment, trust, and asset management products and services to individuals and businesses in the United States. It operates through three segments: Consumer, Commercial, and Wealth. The Consumer segment offers various banking products and services, including consumer deposits; consumer loans, such as automobile, motorcycle, marine, tractor/trailer, recreational vehicle, fixed rate and revolving home equity, and other consumer loans; patient health care financing; real estate loans; indirect and other consumer financing; retail branch network; personal mortgage banking; consumer installment lending; and consumer debit and credit bank cards. The Commercial segment provides corporate lending, leasing, international, merchant and commercial bank card, and securities safekeeping and bond accounting services; and business products, government deposits, and related commercial cash management services, as well as sells fixed income securities to correspondent banks, corporations, public institutions, municipalities, and individuals. The Wealth segment provides traditional trust and estate planning, advisory and discretionary investment portfolio management, and brokerage services, as well as private banking accounts. The company also offers private equity investment, securities brokerage, insurance agency, specialty lending, and leasing services, as well as online and mobile banking services. Commerce Bancshares, Inc. was founded in 1865 and is headquartered in Kansas City, Missouri.