First Commonwealth Financial (NYSE: FCF) and UMB Financial (NASDAQ:UMBF) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, dividends, profitability, earnings, institutional ownership and valuation.
First Commonwealth Financial pays an annual dividend of $0.36 per share and has a dividend yield of 2.1%. UMB Financial pays an annual dividend of $1.16 per share and has a dividend yield of 1.6%. First Commonwealth Financial pays out 43.9% of its earnings in the form of a dividend. UMB Financial pays out 30.9% 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 increased its dividend for 13 consecutive years.
First Commonwealth Financial has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, UMB Financial has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500.
Institutional and Insider Ownership
66.5% of First Commonwealth Financial shares are owned by institutional investors. Comparatively, 86.5% of UMB Financial shares are owned by institutional investors. 1.4% of First Commonwealth Financial shares are owned by company insiders. Comparatively, 10.3% of UMB Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings & Valuation
This table compares First Commonwealth Financial and UMB Financial’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|First Commonwealth Financial||$330.88 million||5.08||$55.16 million||$0.82||20.44|
|UMB Financial||$1.04 billion||3.59||$247.10 million||$3.75||19.88|
UMB Financial has higher revenue and earnings than First Commonwealth Financial. UMB Financial is trading at a lower price-to-earnings ratio than First Commonwealth Financial, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings for First Commonwealth Financial and UMB Financial, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|First Commonwealth Financial||0||4||3||0||2.43|
First Commonwealth Financial currently has a consensus target price of $11.17, suggesting a potential downside of 33.37%. UMB Financial has a consensus target price of $79.67, suggesting a potential upside of 6.85%. Given UMB Financial’s higher probable upside, analysts clearly believe UMB Financial is more favorable than First Commonwealth Financial.
This table compares First Commonwealth Financial and UMB Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|First Commonwealth Financial||22.17%||10.81%||1.33%|
UMB Financial beats First Commonwealth Financial on 9 of the 17 factors compared between the two stocks.
About First Commonwealth Financial
First Commonwealth Financial Corporation, through its subsidiary First Commonwealth Bank, provides consumer and commercial banking services to individuals, and small and mid-sized businesses in the United States. Its consumer services include personal checking accounts, interest-earning checking accounts, savings accounts, insured money market accounts, debit cards, investment certificates, fixed and variable rate certificates of deposit, mortgage loans, secured and unsecured installment loans, construction and real estate loans, safe deposit facilities, credit cards, credit lines with overdraft checking protection, IRA accounts, and automated teller machine (ATM) services, as well as Internet, mobile, and telephone banking services. The company's commercial banking services comprise commercial lending, business checking accounts, online account management services, payroll direct deposits, commercial cash management services, and repurchase agreements. It also offers various trust and asset management services; auto, home, and business insurance, as well as term life insurance; and annuities, mutual funds, stock, and bond brokerage services through a broker-dealer and insurance brokers. As of December 31, 2017, the company operated 104 community banking offices in western and central Pennsylvania; 29 community banking offices in central and northern Ohio; corporate banking centers in Pittsburgh, Pennsylvania, and central and northeast Ohio; mortgage offices in Columbus, Hudson, and Dublin, Ohio; and a network of 148 ATMs. First Commonwealth Financial Corporation was founded in 1934 and is headquartered in Indiana, Pennsylvania.
About UMB Financial
UMB Financial Corporation, a bank holding company, provides various banking and other financial services. It operates through two segments, Bank and Asset Servicing. The Bank segment offers a range of banking services to commercial, retail, government, and correspondent bank customers through its branches, call center, Internet banking, and ATM network. Its services comprise traditional commercial and consumer banking, treasury management, leasing, foreign exchange, merchant bankcard, wealth management, brokerage, insurance, capital markets, investment banking, corporate trust, and correspondent banking. The Asset Servicing segment provides services to the asset management industry, including a range of investment products, such as mutual funds, alternative investments, and managed accounts. Its services include fund administration, fund accounting, investor services, transfer agency, distribution, marketing, custody, alternative investment services, and collective and multiple-series trust services. The company operates through a network of branches and offices in the states of Missouri, Kansas, Colorado, Illinois, Oklahoma, Texas, Arizona, Nebraska, Pennsylvania, South Dakota, Indiana, Utah, Minnesota, California, and Wisconsin. The company was founded in 1913 and is headquartered in Kansas City, Missouri.
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