Financial Review: UMB Financial (NASDAQ:UMBF) vs. First Busey (NASDAQ:BUSE)

UMB Financial (NASDAQ:UMBF) and First Busey (NASDAQ:BUSE) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, dividends, risk, institutional ownership, profitability, analyst recommendations and valuation.

Dividends

UMB Financial pays an annual dividend of $1.72 per share and has a dividend yield of 1.3%. First Busey pays an annual dividend of $1.04 per share and has a dividend yield of 3.9%. UMB Financial pays out 15.3% of its earnings in the form of a dividend. First Busey pays out 46.2% 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 has raised its dividend for 32 consecutive years and First Busey has raised its dividend for 10 consecutive years.

Analyst Ratings

This is a summary of recent recommendations and price targets for UMB Financial and First Busey, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UMB Financial	0	2	9	2	3.00
First Busey	0	3	4	0	2.57

UMB Financial presently has a consensus target price of $145.55, suggesting a potential upside of 10.80%. First Busey has a consensus target price of $27.50, suggesting a potential upside of 3.34%. Given UMB Financial’s stronger consensus rating and higher possible upside, equities research analysts plainly believe UMB Financial is more favorable than First Busey.

Volatility and Risk

UMB Financial has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, First Busey has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500.

Insider and Institutional Ownership

87.8% of UMB Financial shares are held by institutional investors. Comparatively, 56.5% of First Busey shares are held by institutional investors. 5.3% of UMB Financial shares are held by insiders. Comparatively, 3.8% of First Busey shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares UMB Financial and First Busey’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UMB Financial	20.42%	13.07%	1.31%
First Busey	19.16%	10.16%	1.35%

Valuation & Earnings

This table compares UMB Financial and First Busey”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UMB Financial	$4.14 billion	2.41	$702.40 million	$11.27	11.66
First Busey	$1.04 billion	2.18	$135.26 million	$2.25	11.83

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

Summary

UMB Financial beats First Busey on 15 of the 18 factors compared between the two stocks.

About UMB Financial

UMB Financial Corporation operates as the bank holding company that provides banking services and asset servicing in the United States and internationally. The Commercial Banking segment provides commercial loans and credit card; commercial real estate financing; letters of credit; loan syndication, and consultative service; various business solutions including asset-based lending, mezzanine debt, and minority equity investment; and treasury management service, such as depository service, account reconciliation, cash management tool, accounts payable and receivable solution, electronic fund transfer and automated payment, controlled disbursement, lockbox service, and remote deposit capture service. The Institutional Banking segment offers fund, asset management, and healthcare service to institutional clients; and fund administration and accounting, investor service and transfer agency, mutual fund service, alternative investment service, fixed income sale, trading and underwriting, and corporate trust and escrow service, as well as institutional custody service. This segment also provides healthcare payment solution includes custodial service for health saving accounts and private label, multipurpose debit cards to insurance carriers, third-party administrator, software companies, employers, and financial institutions. The Personal Banking segment offers deposit account, retail credit card, private banking, installment loan, home equity line of credit, residential mortgage, as well as internet banking, ATM network, private banking, brokerage and insurance service, and investment advisory, custody, and trust services. It operates through a network of branches and offices. The company was founded in 1913 and is headquartered in Kansas City, Missouri.

About First Busey

First Busey Corporation operates as the bank holding company for Busey Bank that engages in the provision of retail and commercial banking products and services to individual, corporate, institutional, and governmental customers in the United States. It operates through three segments: Banking, Wealth Management, and FirsTech. The Banking segment provides banking services to individual customers, such as demand and savings deposits, money transfers, safe deposit services, individual retirement accounts and other fiduciary services, automated teller machines, and technology-based networks, as well as loan products, including residential real estate, home equity lines of credit, and consumer loans. This segment also offers banking services to corporate customers, including commercial, commercial real estate, real estate construction, and agricultural loans, as well as cash management services. The Wealth Management segment offers a range of investment and asset management, investment, brokerage, investment strategy consulting, fiduciary, philanthropic advisory, tax preparation, business succession planning, and employee retirement plan services to individuals, businesses, and foundations; and professional farm management services to the agricultural industry. The FirsTech segment provides payment technology solutions comprising online, mobile, and voice-recognition bill payments; money management and credit card networks; direct debit services; lockbox remittance processing for payments made by mail; and walk-in payments, as well as tools to help clients with billing, reconciliation, bill reminders, and treasury services. The company was founded in 1868 and is headquartered in Champaign, Illinois.