United Bankshares (NASDAQ:UBSI) and Heritage Commerce (NASDAQ:HTBK) Financial Comparison


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United Bankshares (NASDAQ:UBSI) and Heritage Commerce (NASDAQ:HTBK) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, profitability, valuation and earnings.

Analyst Ratings

This is a breakdown of recent ratings and price targets for United Bankshares and Heritage Commerce, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Bankshares 0 4 1 0 2.20
Heritage Commerce 0 1 2 0 2.67

United Bankshares currently has a consensus target price of $34.33, suggesting a potential downside of 14.83%. Heritage Commerce has a consensus target price of $10.17, suggesting a potential downside of 17.34%. Given United Bankshares’ higher probable upside, analysts plainly believe United Bankshares is more favorable than Heritage Commerce.

Earnings & Valuation

This table compares United Bankshares and Heritage Commerce’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
United Bankshares $913.05 million 5.69 $260.10 million $2.55 15.81
Heritage Commerce $152.90 million 4.82 $40.46 million $1.07 11.50

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

Profitability

This table compares United Bankshares and Heritage Commerce’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
United Bankshares 24.26% 6.85% 1.13%
Heritage Commerce 17.58% 7.17% 0.95%

Risk & Volatility

United Bankshares has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500. Comparatively, Heritage Commerce has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500.

Dividends

United Bankshares pays an annual dividend of $1.40 per share and has a dividend yield of 3.5%. Heritage Commerce pays an annual dividend of $0.52 per share and has a dividend yield of 4.2%. United Bankshares pays out 54.9% of its earnings in the form of a dividend. Heritage Commerce pays out 48.6% 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. United Bankshares has raised its dividend for 1 consecutive years and Heritage Commerce has raised its dividend for 1 consecutive years. Heritage Commerce is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

63.3% of United Bankshares shares are held by institutional investors. Comparatively, 68.4% of Heritage Commerce shares are held by institutional investors. 5.8% of United Bankshares shares are held by insiders. Comparatively, 4.3% of Heritage Commerce shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

United Bankshares beats Heritage Commerce on 9 of the 16 factors compared between the two stocks.

About United Bankshares

United Bankshares, Inc., a financial holding company, primarily provides commercial and retail banking products and services in the United States. It operates through two segments, Community Banking and Mortgage Banking. The company accepts checking, savings, and time and money market accounts; individual retirement accounts; and demand deposits, statement and special savings, and interest-bearing checking accounts. Its loan products include commercial loans and leases; construction and real estate loans; personal, credit card, commercial, and floor plan loans; and credit card and home equity loans. In addition, the company provides credit cards; safe deposit boxes, wire transfers, and other banking products and services; investment and security services; services to correspondent banks, including buying and selling federal funds; automated teller machine services; and internet and telephone banking services. Further, it offers community banking services, such as asset management, real property title insurance, financial planning, mortgage banking, and brokerage services. As of January 28, 2021, the company operated 230 offices in West Virginia, Virginia, Ohio, Pennsylvania, Maryland, North Carolina, South Carolina, Georgia, and Washington, D.C. United Bankshares, Inc. was incorporated in 1982 and is headquartered in Charleston, West Virginia.

About Heritage Commerce

Heritage Commerce Corp operates as the bank holding company for Heritage Bank of Commerce that provides various commercial and personal banking services to residents and the business/professional community in California. Its deposit products for business banking and retail markets include interest and non-interest bearing demand, savings, and money market accounts, as well as certificates of deposit and time deposits. The company's loan portfolio comprises commercial loans, such as operating secured and unsecured loans advanced for working capital, equipment purchases, and other business purposes; commercial real estate loans; commercial construction loans for rental properties, commercial buildings, and homes; small business administration loans; home equity lines of credit; multifamily loans on residential properties; residential mortgage loans; and consumer loans consisting of loans for financing automobiles, various consumer goods, and other personal purposes. In addition, it offers other banking services, including cashier's checks, bank by mail, night depositories, safe deposit boxes, direct deposit, automated payroll, electronic funds transfer, online bill pay, homeowner association, remote deposit capture, automated clearing house origination, electronic data interchange, and check imaging services, as well as other customary banking, factoring financing, and electronic banking services. The company operates through nineteen full-service branch offices located in the general San Francisco Bay Area of California. Heritage Commerce Corp was founded in 1994 and is headquartered in San Jose, California.

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