Critical Analysis: UMB Financial (NASDAQ:UMBF) vs. ECB Bancorp (NASDAQ:ECBK)

ECB Bancorp (NASDAQ:ECBK) and UMB Financial (NASDAQ:UMBF) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, earnings, valuation, institutional ownership, profitability and analyst recommendations.

Earnings & Valuation

This table compares ECB Bancorp and UMB Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ECB Bancorp	$79.51 million	2.19	$7.77 million	$1.37	14.57
UMB Financial	$4.14 billion	2.36	$702.40 million	$12.01	10.73

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ECB Bancorp	13.19%	6.55%	0.70%
UMB Financial	21.64%	13.41%	1.38%

Insider & Institutional Ownership

30.3% of ECB Bancorp shares are owned by institutional investors. Comparatively, 87.8% of UMB Financial shares are owned by institutional investors. 10.4% of ECB Bancorp shares are owned by company insiders. Comparatively, 5.3% of UMB Financial shares are owned 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.

Risk & Volatility

ECB Bancorp has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500. Comparatively, UMB Financial has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for ECB Bancorp and UMB Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ECB Bancorp	0	0	0	1	4.00
UMB Financial	0	4	11	1	2.81

UMB Financial has a consensus price target of $163.86, indicating a potential upside of 27.16%. Given UMB Financial’s higher probable upside, analysts plainly believe UMB Financial is more favorable than ECB Bancorp.

Summary

UMB Financial beats ECB Bancorp on 11 of the 14 factors compared between the two stocks.

About ECB Bancorp

ECB Bancorp, Inc. operating as a holding company for Everett Co-operative Bank that provides various banking products and services. The company accepts various deposit products, including certificate of deposit accounts, IRAs, money market accounts, savings accounts, demand deposit accounts, and interest-bearing and noninterest-bearing checking accounts. It also offers one- to four-family residential real estate, commercial real estate and multifamily real estate, construction and land, commercial, and consumer loans, as well as home equity loans and lines of credit. In addition, the company invests in securities, consisting primarily of U.S. government and federal agency obligations, mortgage-backed securities, and corporate bonds. ECB Bancorp, Inc. was founded in 1890 and is based in Everett, Massachusetts.

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.