Banner (NASDAQ:BANR) versus United Bancorporation of Alabama (OTCMKTS:UBAB) Financial Analysis

United Bancorporation of Alabama (OTCMKTS:UBAB) and Banner (NASDAQ:BANR) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Analyst Ratings

This is a summary of current ratings for United Bancorporation of Alabama and Banner, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Bancorporation of Alabama	0	0	0	0	N/A
Banner	0	3	3	0	2.50

Banner has a consensus price target of $56.80, indicating a potential downside of 4.54%. Given Banner’s higher probable upside, analysts plainly believe Banner is more favorable than United Bancorporation of Alabama.

Dividends

United Bancorporation of Alabama pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. Banner pays an annual dividend of $1.92 per share and has a dividend yield of 3.2%. United Bancorporation of Alabama pays out 11.5% of its earnings in the form of a dividend. Banner pays out 39.9% 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.

Volatility and Risk

United Bancorporation of Alabama has a beta of 0.43, suggesting that its share price is 57% less volatile than the S&P 500. Comparatively, Banner has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500.

Insider and Institutional Ownership

5.5% of United Bancorporation of Alabama shares are owned by institutional investors. Comparatively, 87.3% of Banner shares are owned by institutional investors. 1.6% of Banner shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares United Bancorporation of Alabama and Banner’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Bancorporation of Alabama	33.46%	25.96%	2.30%
Banner	20.93%	10.89%	1.14%

Valuation and Earnings

This table compares United Bancorporation of Alabama and Banner”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Bancorporation of Alabama	$87.26 million	2.12	$31.54 million	$8.71	5.97
Banner	$595.20 million	3.44	$183.62 million	$4.81	12.37

Banner has higher revenue and earnings than United Bancorporation of Alabama. United Bancorporation of Alabama is trading at a lower price-to-earnings ratio than Banner, indicating that it is currently the more affordable of the two stocks.

Summary

Banner beats United Bancorporation of Alabama on 10 of the 15 factors compared between the two stocks.

About United Bancorporation of Alabama

United Bancorporation of Alabama, Inc. operates as the bank holding company for United Bank that provides banking services. The company offers checking and savings accounts, certificates of deposit, individual retirement accounts, small business programs, business solutions, merchant services, and cash management services. It also provides various lending services, such as personal loans, business loans, lines of credit, and equipment loans; real estate loans for the agricultural community and working lines of credit; and overdraft services. In addition, the company offers debit cards, prepaid cards, Visa credit cards, gift cards, and safe deposit boxes. Further, it provides check cashing, convenience, remote deposit, mobile check deposit, personal storage compartments, Web payment options, insurance products, investment and brokerage, and online and mobile banking services. United Bancorporation of Alabama, Inc. was founded in 1904 and is based in Atmore, Alabama.

About Banner

Banner Corporation operates as the bank holding company for Banner Bank that engages in the provision of commercial banking and financial products and services to individuals, businesses, and public sector entities in the United States. It accepts various deposit instruments, including interest-bearing and non-interest-bearing checking accounts, money market deposit accounts, regular savings accounts, and certificates of deposit, as well as treasury management services and retirement savings plans. The company also provides commercial real estate loans, including owner-occupied, investment properties, and multifamily residential real estate loans; construction, land, and land development loans; one- to four-family residential real estate lending; commercial business loans; agricultural loans; consumer and other loans, such as home equity lines of credit, automobile, and boat and recreational vehicle loans, as well as loans secured by deposit accounts; and small business administration loans. In addition, it provides electronic and digital banking services comprising debit cards and ATMs, internet banking, remote deposit, and mobile banking services. The company was founded in 1890 and is based in Walla Walla, Washington.