Critical Comparison: BOK Financial (NASDAQ:BOKF) vs. United Community Banks (NYSE:UCB)

United Community Banks (NYSE:UCB) and BOK Financial (NASDAQ:BOKF) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Earnings & Valuation

This table compares United Community Banks and BOK Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Community Banks	$1.54 billion	2.68	$328.10 million	$3.04	11.22
BOK Financial	$3.38 billion	2.31	$577.99 million	$10.61	12.10

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

Analyst Recommendations

This is a summary of current ratings and price targets for United Community Banks and BOK Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Community Banks	0	3	4	1	2.75
BOK Financial	1	9	2	0	2.08

United Community Banks presently has a consensus price target of $39.60, indicating a potential upside of 16.07%. BOK Financial has a consensus price target of $140.45, indicating a potential upside of 9.42%. Given United Community Banks’ stronger consensus rating and higher possible upside, research analysts clearly believe United Community Banks is more favorable than BOK Financial.

Institutional & Insider Ownership

82.3% of United Community Banks shares are held by institutional investors. Comparatively, 34.4% of BOK Financial shares are held by institutional investors. 0.5% of United Community Banks shares are held by insiders. Comparatively, 63.5% of BOK Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares United Community Banks and BOK Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Community Banks	24.43%	9.61%	1.24%
BOK Financial	18.97%	10.09%	1.16%

Volatility and Risk

United Community Banks has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500. Comparatively, BOK Financial has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500.

Dividends

United Community Banks pays an annual dividend of $1.04 per share and has a dividend yield of 3.0%. BOK Financial pays an annual dividend of $2.52 per share and has a dividend yield of 2.0%. United Community Banks pays out 34.2% of its earnings in the form of a dividend. BOK Financial pays out 23.8% 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. BOK Financial has increased its dividend for 20 consecutive years.

Summary

United Community Banks beats BOK Financial on 10 of the 18 factors compared between the two stocks.

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. The company accepts various deposit products, including checking, savings, money market, and other deposit accounts. It 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, the company originate loans partially guaranteed by the SBA and USDA loan programs. Further, it 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, the company offers reinsurance on a property insurance contract; insurance agency services; brokerage services; and payment processing, merchant, wire transfer, private banking, and other related financial services. It operates through a network of 171 branches in Florida, Georgia, North Carolina, South Carolina, and Tennessee. United Community Banks, Inc. was founded in 1950 and is headquartered in Blairsville, Georgia.

About BOK Financial

BOK Financial Corporation operates as the financial holding company for BOKF, NA that provides various financial products and services in Oklahoma, Texas, New Mexico, Northwest Arkansas, Colorado, Arizona, and Kansas/Missouri. It operates through three segments: Commercial Banking, Consumer Banking, and Wealth Management. The Commercial Banking segment offers lending, treasury, cash management, and customer commodity risk management products for small businesses, middle market, and larger commercial customers, as well as operates TransFund electronic funds transfer network. The Consumer Banking segment engages in the provision of retail lending and deposit services to small business customers through retail branch network; and mortgage loan origination and servicing activities. The Wealth Management segment offers fiduciary, private bank, insurance, and investment advisory services; and brokerage and trading services primarily related to providing liquidity to the mortgage markets through trading of U.S. government agency mortgage-backed securities and related derivative contracts, as well as underwrites state and municipal securities. The company also provides commercial loans, such as loans for working capital, facilities acquisition or expansion, purchases of equipment, and other needs of commercial customers; and service, healthcare, manufacturing, wholesale/retail, energy, and other sector loans. In addition, it offers commercial real estate loans for the construction of buildings or other improvements to real estate and property held by borrowers for investment purposes; residential mortgage and personal loans; and automated teller machine, call center, and Internet and mobile banking services. The company was founded in 1910 and is headquartered in Tulsa, Oklahoma.