Southside Bancshares (NASDAQ:SBSI – Get Free Report) and United Community Banks (NASDAQ:UCB – Get Free Report) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.
Profitability
This table compares Southside Bancshares and United Community Banks’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Southside Bancshares | 19.40% | 11.10% | 1.06% |
| United Community Banks | 16.48% | 8.64% | 1.04% |
Dividends
Southside Bancshares pays an annual dividend of $1.44 per share and has a dividend yield of 4.8%. United Community Banks pays an annual dividend of $0.96 per share and has a dividend yield of 3.1%. Southside Bancshares pays out 49.5% of its earnings in the form of a dividend. United Community Banks pays out 47.1% 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.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Southside Bancshares | $256.38 million | 3.58 | $88.49 million | $2.91 | 10.40 |
| United Community Banks | $930.04 million | 4.01 | $252.40 million | $2.04 | 15.33 |
United Community Banks has higher revenue and earnings than Southside Bancshares. Southside Bancshares 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.
Institutional & Insider Ownership
55.7% of Southside Bancshares shares are owned by institutional investors. Comparatively, 82.3% of United Community Banks shares are owned by institutional investors. 5.9% of Southside Bancshares shares are owned by insiders. Comparatively, 0.5% of United Community Banks shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Southside Bancshares and United Community Banks, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Southside Bancshares | 0 | 3 | 0 | 0 | 2.00 |
| United Community Banks | 0 | 2 | 1 | 0 | 2.33 |
Southside Bancshares currently has a consensus target price of $37.00, indicating a potential upside of 22.27%. United Community Banks has a consensus target price of $33.33, indicating a potential upside of 6.58%. Given Southside Bancshares’ higher probable upside, research analysts clearly believe Southside Bancshares is more favorable than United Community Banks.
Risk & Volatility
Southside Bancshares has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500. Comparatively, United Community Banks has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500.
Summary
United Community Banks beats Southside Bancshares on 9 of the 16 factors compared between the two stocks.
About Southside Bancshares
Southside Bancshares, Inc. operates as the bank holding company for Southside Bank that provides a range of financial services to individuals, businesses, municipal entities, and nonprofit organizations. Its deposit products include savings, money market, and interest and noninterest bearing checking accounts, as well as certificates of deposits. The company’s loan portfolio comprises consumer loans that include 1-4 family residential loans, home equity loans, home improvement loans, automobile loans, and other consumer related loans; commercial loans, such as short-term working capital loans for inventory and accounts receivable, short and medium-term loans for equipment or other business capital expansion, commercial real estate loans, and municipal loans; and construction loans for 1-4 family residential and commercial real estate. It also offers wealth management and trust services consisting of investment management, administration of irrevocable, revocable, and testamentary trusts, estate administration, and custodian services for individuals, partnerships, and corporations; safe deposit services; and brokerage services. In addition, the company provides retirement and employee benefit accounts, including plans and profit sharing plans; and telephone, internet, and mobile banking services. The company offers various banking services through branches, drive-thru facilities, automated teller machines, and interactive teller machines. Southside Bancshares, Inc. was founded in 1960 and is headquartered in Tyler, Texas.
About United Community Banks
United Community Banks, Inc. operates as the financial holding company for United Community Bank that provides financial products and services to commercial, retail, government, education, energy, health care, and real estate sectors. It accepts various deposit products, including checking, savings, money market, and other deposit accounts. The company also offers lending services, including real estate, consumer, and commercial loans, to individuals, small businesses, mid-sized commercial businesses, and non-profit organizations, as well as secured and unsecured, and mortgage loans. In addition, it originates loans partially guaranteed by the SBA and USDA loan programs. Further, the company provides wealth management services comprising financial planning, customized portfolio management, and investment advice; trust services to manage fiduciary assets; non-deposit investment products; and insurance products, including life insurance, long-term care insurance, and tax-deferred annuities, as well as invests in residential and commercial mortgage-backed securities, asset-backed securities, the U.S. treasury, the U.S. agency, and municipal obligations. Additionally, it offers reinsurance on a property insurance contract; insurance agency services; treasury management; credit cards; payment and commerce solution, equipment finance, investment advisory, and other related financial services; brokerage services; and payment processing, merchant, wire transfer, private banking, and other related financial services. The company was founded in 1950 and is headquartered in Blairsville, Georgia.
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