Head to Head Review: UMB Financial (NASDAQ:UMBF) & Business First Bancshares (NASDAQ:BFST)

Business First Bancshares (NASDAQ:BFST) and UMB Financial (NASDAQ:UMBF) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Business First Bancshares	17.07%	11.03%	1.13%
UMB Financial	21.64%	13.41%	1.38%

Volatility and Risk

Business First Bancshares has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, UMB Financial has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.

Earnings and Valuation

This table compares Business First Bancshares and UMB Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Business First Bancshares	$516.55 million	1.92	$87.86 million	$2.82	10.81
UMB Financial	$2.69 billion	3.67	$702.40 million	$12.01	10.85

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

Dividends

Business First Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.0%. UMB Financial pays an annual dividend of $2.00 per share and has a dividend yield of 1.5%. Business First Bancshares pays out 21.3% of its earnings in the form of a dividend. UMB Financial pays out 16.7% 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. Business First Bancshares has increased its dividend for 2 consecutive years and UMB Financial has increased its dividend for 32 consecutive years.

Analyst Ratings

This is a summary of current ratings and target prices for Business First Bancshares and UMB Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Business First Bancshares	0	0	5	0	3.00
UMB Financial	0	4	11	1	2.81

Business First Bancshares currently has a consensus price target of $34.75, indicating a potential upside of 13.97%. UMB Financial has a consensus price target of $163.86, indicating a potential upside of 25.75%. Given UMB Financial’s higher probable upside, analysts plainly believe UMB Financial is more favorable than Business First Bancshares.

Insider and Institutional Ownership

47.4% of Business First Bancshares shares are held by institutional investors. Comparatively, 87.8% of UMB Financial shares are held by institutional investors. 5.7% of Business First Bancshares shares are held by insiders. Comparatively, 5.3% of UMB Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

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

About Business First Bancshares

Business First Bancshares, Inc. operates as the bank holding company for b1BANK that provides various banking products and services in Louisiana and Texas. It offers various deposit products and services, including checking, demand, money market, time, and savings accounts; and certificates of deposits, remote deposit capture, and direct deposit services. The company also provides commercial and industrial loans, such as working capital, term, equipment financing, asset acquisition, expansion and development, borrowing base, and other loan products, as well as commercial lines of credit, accounts receivable factoring, agricultural financing, and letters of credit; construction and development loans; commercial real estate loans; residential real estate loans comprising first and second lien 1-4 family mortgage loans, and home equity lines of credit; and consumer loans, including secured and unsecured installment, and term loans. In addition, it offers wealth management products, including mutual funds, annuities, individual retirement accounts, and other financial products, as well as other fiduciary and private banking products and services. Further, the company provides a range of other financial services comprising debit and credit cards, treasury and cash management, merchant, automated clearing house, lock-box, receivables factoring, correspondent banking, and other treasury services, as well as employee and payroll benefits solutions; and drive-through banking facilities, automated teller machines, night depository, personalized checks, electronic funds transfer, domestic and foreign wire transfer, traveler's checks, vault, loan and deposit sweep accounts, online and mobile banking, e-statements, and bank-by-mail services. Business First Bancshares, Inc. was founded in 2006 and is headquartered in Baton Rouge, Louisiana.

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.