Enterprise Financial Services (NASDAQ:EFSC – Get Free Report) and United Bankshares (NASDAQ:UBSI – Get Free Report) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, earnings, profitability and institutional ownership.
Profitability
This table compares Enterprise Financial Services and United Bankshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Enterprise Financial Services | 19.73% | 10.81% | 1.24% |
| United Bankshares | 22.05% | 7.58% | 1.23% |
Dividends
Enterprise Financial Services pays an annual dividend of $1.08 per share and has a dividend yield of 1.8%. United Bankshares pays an annual dividend of $1.48 per share and has a dividend yield of 3.6%. Enterprise Financial Services pays out 22.9% of its earnings in the form of a dividend. United Bankshares pays out 56.1% 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. United Bankshares has raised its dividend for 25 consecutive years. United Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Enterprise Financial Services | 0 | 0 | 3 | 0 | 3.00 |
| United Bankshares | 0 | 3 | 1 | 0 | 2.25 |
Enterprise Financial Services currently has a consensus price target of $58.33, suggesting a potential downside of 1.75%. United Bankshares has a consensus price target of $40.25, suggesting a potential downside of 2.66%. Given Enterprise Financial Services’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Enterprise Financial Services is more favorable than United Bankshares.
Earnings and Valuation
This table compares Enterprise Financial Services and United Bankshares”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Enterprise Financial Services | $833.64 million | 2.64 | $194.06 million | $4.72 | 12.58 |
| United Bankshares | $1.54 billion | 3.64 | $366.31 million | $2.64 | 15.66 |
United Bankshares has higher revenue and earnings than Enterprise Financial Services. Enterprise Financial Services is trading at a lower price-to-earnings ratio than United Bankshares, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
72.2% of Enterprise Financial Services shares are owned by institutional investors. Comparatively, 70.8% of United Bankshares shares are owned by institutional investors. 2.3% of Enterprise Financial Services shares are owned by company insiders. Comparatively, 3.7% of United Bankshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Risk & Volatility
Enterprise Financial Services has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500. Comparatively, United Bankshares has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500.
Summary
United Bankshares beats Enterprise Financial Services on 9 of the 17 factors compared between the two stocks.
About Enterprise Financial Services
Enterprise Financial Services Corp operates as the holding company for Enterprise Bank & Trust that offers banking and wealth management services to individuals and corporate customers primarily in Arizona, California, Florida, Kansas, Missouri, Nevada, and New Mexico. It provides checking, savings, money market accounts, and certificates of deposit. The company also provides commercial and industrial, commercial real estate, real estate construction and development, residential real estate, small business administration, agricultural, consumer, and other loan products. In addition, it offers treasury management and international trade services; tax credit brokerage services; life insurance premium and sponsor finance; tax credit related lending; other deposit accounts, such as community associations, property management, third party escrow, and trust services; treasury management product and services; customized solutions and products; cash management; fiduciary, investment management, and financial advisory services; and customer hedging products, including international banking, card services, and tax credit businesses. Further, the company provides online, device applications, text, and voice banking; remote deposit capture; internet banking, mobile banking, cash management, positive pay services, fraud detection and prevention, automated payables, check image, and statement and document imaging; and controlled disbursements, repurchase agreements, and sweep investment accounts. Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.
About United Bankshares
United Bankshares, Inc., through its subsidiaries, primarily provides commercial and retail banking products and services in the United States. It operates through two segments, Community Banking and Mortgage Banking. The company accepts checking, savings, and time and money market accounts; individual retirement accounts; and demand deposits, statement and special savings, and NOW accounts. Its loan products include commercial loans and leases to small to mid-size industrial and commercial companies; construction and real estate loans, such as commercial and residential mortgages, and loans secured by owner-occupied real estate; personal, student, credit card receivables, personal, commercial, and floor plan loans; and home equity loans. In addition, the company provides credit cards; safe deposit boxes, wire transfers, and other banking products and services; investment and security services; services to correspondent banks, including buying and selling federal funds; automated teller machine services; and internet and telephone banking services. Further, it offers community banking services, such as asset management, real property title insurance, financial planning, mortgage banking, and brokerage services, as well as investment management and retirement planning services. United Bankshares, Inc. was incorporated in 1982 and is headquartered in Charleston, West Virginia.
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