Head-To-Head Analysis: UMB Financial (UMBF) and First Commonwealth Financial (NYSE:FCF)

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

Risk & Volatility

First Commonwealth Financial has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.Comparatively, UMB Financial has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Commonwealth Financial $330.88 million 5.07 $55.16 million $0.82 20.40
UMB Financial $1.04 billion 3.63 $247.10 million $3.75 20.09

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.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for First Commonwealth Financial and UMB Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Commonwealth Financial 0 6 1 0 2.14
UMB Financial 0 3 0 0 2.00

First Commonwealth Financial currently has a consensus price target of $16.00, indicating a potential downside of 4.36%. UMB Financial has a consensus price target of $79.67, indicating a potential upside of 5.77%. Given UMB Financial’s higher possible upside, analysts plainly believe UMB Financial is more favorable than First Commonwealth Financial.

Profitability

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 25.18% 9.94% 1.03%

Dividends

First Commonwealth Financial pays an annual dividend of $0.36 per share and has a dividend yield of 2.2%. UMB Financial pays an annual dividend of $1.16 per share and has a dividend yield of 1.5%. 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.

Insider and Institutional Ownership

68.7% of First Commonwealth Financial shares are held by institutional investors. Comparatively, 89.4% of UMB Financial shares are held by institutional investors. 1.4% of First Commonwealth Financial shares are held by company insiders. Comparatively, 10.3% of UMB Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

UMB Financial beats First Commonwealth Financial on 9 of the 17 factors compared between the two stocks.

First Commonwealth Financial Company Profile

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.

UMB Financial Company Profile

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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