Middleburg Financial Corp. (NASDAQ: MBRG) and UMB Financial Corporation (NASDAQ:UMBF) are both financials companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, dividends, profitability, institutional ownership and valuation.

Profitability

This table compares Middleburg Financial Corp. and UMB Financial Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Middleburg Financial Corp. 8.07% 3.43% 0.34%
UMB Financial Corporation 16.59% 8.81% 0.87%

Dividends

Middleburg Financial Corp. pays an annual dividend of $0.52 per share and has a dividend yield of 1.3%. UMB Financial Corporation pays an annual dividend of $1.02 per share and has a dividend yield of 1.5%. Middleburg Financial Corp. pays out 46.0% of its earnings in the form of a dividend. UMB Financial Corporation pays out 29.4% 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 Corporation has raised its dividend for 12 consecutive years. UMB Financial Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Middleburg Financial Corp. and UMB Financial Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Middleburg Financial Corp. N/A N/A N/A $1.13 34.26
UMB Financial Corporation $972.49 million 3.51 $173.53 million $3.47 19.69

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

Risk & Volatility

Middleburg Financial Corp. has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500. Comparatively, UMB Financial Corporation has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500.

Institutional and Insider Ownership

29.1% of Middleburg Financial Corp. shares are held by institutional investors. Comparatively, 82.5% of UMB Financial Corporation shares are held by institutional investors. 5.1% of Middleburg Financial Corp. shares are held by company insiders. Comparatively, 10.1% of UMB Financial Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Middleburg Financial Corp. and UMB Financial Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Middleburg Financial Corp. 0 0 0 0 N/A
UMB Financial Corporation 1 4 1 0 2.00

UMB Financial Corporation has a consensus target price of $75.50, indicating a potential upside of 10.48%. Given UMB Financial Corporation’s higher possible upside, analysts plainly believe UMB Financial Corporation is more favorable than Middleburg Financial Corp..

Summary

UMB Financial Corporation beats Middleburg Financial Corp. on 13 of the 13 factors compared between the two stocks.

Middleburg Financial Corp. Company Profile

Middleburg Financial Corporation is a bank holding company. The Company conducts its primary operations through two subsidiaries, Middleburg Bank and Middleburg Investment Group, Inc. The Company has another subsidiary, MFC Capital Trust II. The Company’s segments are Commercial & Retail Banking, which includes loans, investment securities and deposit accounts; Wealth Management, including wealth management activities, and Mortgage Banking, which includes mortgage banking activities. The Company, through its subsidiaries, offers a range of banking, fiduciary and investment management services to both individuals and small businesses. The Company’s business activities include commercial and retail banking services through Middleburg Bank, wealth management services through Middleburg Investment Group, Inc., and mortgage banking services. Other banking services available to its clients include Internet banking, travelers’ checks, safe deposit rentals, notary public and wire services.

UMB Financial Corporation Company Profile

UMB Financial Corporation is a diversified financial holding company. The Company supplies banking services, institutional investment management, asset servicing and payment solutions to its customers in the United States and around the globe. The Company’s segments include Bank, which provides a range of banking services to commercial, retail, government and correspondent bank customers through the Company’s branches, call center, Internet banking and automated teller machine network; Institutional Investment Management, which provides equity and fixed income investment strategies in the intermediary and institutional markets, and Asset Servicing, which provides services to the asset management industry, supporting a range of investment products, including mutual funds, alternative investments and managed accounts. The Company’s subsidiaries include Scout Investments, Inc. (Scout), an institutional asset-management company, and UMB Fund Services, Inc. (UMBFS).

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