Union Bankshares Corporation (NASDAQ: UBSH) and Webster Financial Corporation (NYSE:WBS) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, earnings, profitability, institutional ownership and valuation.

Profitability

This table compares Union Bankshares Corporation and Webster Financial Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Union Bankshares Corporation 20.02% 7.98% 0.93%
Webster Financial Corporation 21.09% 9.89% 0.93%

Analyst Ratings

This is a summary of recent recommendations for Union Bankshares Corporation and Webster Financial Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Union Bankshares Corporation 0 1 2 1 3.00
Webster Financial Corporation 1 6 2 0 2.11

Union Bankshares Corporation currently has a consensus target price of $38.50, indicating a potential upside of 8.60%. Webster Financial Corporation has a consensus target price of $54.88, indicating a potential upside of 1.96%. Given Union Bankshares Corporation’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Union Bankshares Corporation is more favorable than Webster Financial Corporation.

Volatility and Risk

Union Bankshares Corporation has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500. Comparatively, Webster Financial Corporation has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500.

Dividends

Union Bankshares Corporation pays an annual dividend of $0.84 per share and has a dividend yield of 2.4%. Webster Financial Corporation pays an annual dividend of $1.04 per share and has a dividend yield of 1.9%. Union Bankshares Corporation pays out 46.7% of its earnings in the form of a dividend. Webster Financial Corporation pays out 41.1% 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. Webster Financial Corporation has raised its dividend for 6 consecutive years.

Insider and Institutional Ownership

64.9% of Union Bankshares Corporation shares are owned by institutional investors. Comparatively, 93.7% of Webster Financial Corporation shares are owned by institutional investors. 2.2% of Union Bankshares Corporation shares are owned by company insiders. Comparatively, 2.2% of Webster Financial Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Union Bankshares Corporation and Webster Financial Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Union Bankshares Corporation $365.83 million 4.24 $77.47 million $1.80 19.69
Webster Financial Corporation $1.09 billion 4.56 $207.12 million $2.53 21.27

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

Summary

Webster Financial Corporation beats Union Bankshares Corporation on 11 of the 16 factors compared between the two stocks.

Union Bankshares Corporation Company Profile

Union Bankshares Corporation is a financial holding company and bank holding company. The Company operates through two segments: a community bank segment and mortgage loan origination business segment. The Company offers financial services through its community bank subsidiary, Union Bank & Trust (the Bank) and three non-bank financial services affiliates. The Company’s non-bank financial services affiliates include Union Mortgage Group, Inc. (UMG), Union Insurance Group, LLC and Old Dominion Capital Management, Inc. The community bank segment included one subsidiary bank, which provided loan, deposit, investment, and trust services to retail and commercial customers throughout its 114 retail locations in Virginia, as of December 31, 2016. The mortgage segment includes UMG, which provides a range of mortgage loan products principally in Virginia, North Carolina, Maryland, and the Washington D.C. metro area.

Webster Financial Corporation Company Profile

Webster Financial Corporation is a bank and financial holding company. The Company’s segments include Commercial Banking, Community Banking, HSA Bank, Private Banking, and Corporate and Reconciling. The Commercial Banking segment includes middle-market, asset-based lending, commercial real estate, equipment finance, and treasury and payment solutions, which includes government and institutional banking. The Community Banking segment consists of its Personal Banking and Business Banking segments. HSA Bank, a division of its subsidiary, Webster Bank, National Association, offers health savings accounts, health reimbursement accounts, flexible spending accounts, and other financial solutions. Private Banking serves high-net-worth clients, not-for-profit organizations, and business clients with asset management, trust, loan and deposit products, and financial planning services. Its treasury unit and consumer-liquidating portfolio are included in the Corporate and Reconciling segment.

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