Critical Survey: Columbia Banking System (NASDAQ:COLB) & Union Bankshares (NASDAQ:UNB)

Columbia Banking System (NASDAQ:COLB) and Union Bankshares (NASDAQ:UNB) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, dividends, risk and earnings.

Volatility and Risk

Columbia Banking System has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500. Comparatively, Union Bankshares has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500.

Valuation and Earnings

This table compares Columbia Banking System and Union Bankshares’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Columbia Banking System	$2.74 billion	1.49	$348.71 million	$2.33	8.39
Union Bankshares	$46.15 million	2.12	$11.26 million	$2.37	9.14

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

Analyst Recommendations

This is a breakdown of current recommendations for Columbia Banking System and Union Bankshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Columbia Banking System	0	11	2	0	2.15
Union Bankshares	0	0	0	0	N/A

Columbia Banking System presently has a consensus price target of $22.04, suggesting a potential upside of 12.67%. Given Columbia Banking System’s higher probable upside, research analysts plainly believe Columbia Banking System is more favorable than Union Bankshares.

Profitability

This table compares Columbia Banking System and Union Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Columbia Banking System	16.52%	11.58%	1.07%
Union Bankshares	15.19%	17.85%	0.76%

Dividends

Columbia Banking System pays an annual dividend of $1.44 per share and has a dividend yield of 7.4%. Union Bankshares pays an annual dividend of $1.44 per share and has a dividend yield of 6.7%. Columbia Banking System pays out 61.8% of its earnings in the form of a dividend. Union Bankshares pays out 60.8% 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. Union Bankshares has raised its dividend for 11 consecutive years.

Institutional and Insider Ownership

92.5% of Columbia Banking System shares are held by institutional investors. Comparatively, 14.8% of Union Bankshares shares are held by institutional investors. 0.6% of Columbia Banking System shares are held by company insiders. Comparatively, 1.1% of Union Bankshares shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

About Columbia Banking System

Columbia Banking System, Inc. operates as the holding company of Umpqua Bank that provides banking, private banking, mortgage, and other financial services in the United States. The company offers deposit products, including business, non-interest bearing checking, interest-bearing checking and savings, money market, and certificate of deposit accounts; and insured cash sweep and other investment sweep solutions. It also provides commercial lending products, such as commercial lines of credit and term loans, accounts receivable and inventory financing, international trade finance, commercial property loans, multifamily loans, equipment loans, commercial equipment leases, real estate construction loans and permanent financing, and small business administration program financing, as well as capital markets. In addition, the company offers wealth management comprising financial planning, investment, trust, and insurance; treasury management, which includes digital and mobile banking solutions, ACH, wires, positive pay, remote deposit capture, integrated payments, integrated receivables, lockbox, cash vault, real-time payments, commercial card, and foreign exchange and international banking related products, as well as merchant services; and brokerage services, residential real estate loans and consumer loans. It serves its products to corporate, institutional, small business, and individual customers. The company was founded in 1953 and is headquartered in Tacoma, Washington.

About Union Bankshares

Union Bankshares, Inc. operates as the bank holding company for Union Bank that provides retail, commercial, and municipal banking products and services in northern Vermont and New Hampshire. It offers retail depository services, such as personal checking, savings, money market, IRA/SEP/KEOGH, and health savings accounts, as well as certificates of deposit. The company also provides commercial real estate loans; commercial loans for plant and equipment, working capital, real estate renovation, and other business purposes to business owners and investors; small business administration guaranteed loans; residential construction and mortgage loans; municipal financing, including loans and excess deposits secured by FHLBB letters of credit; and home improvement loans and overdraft checking privileges against preauthorized lines of credit. In addition, it offers online cash management services, including account reconciliation, credit card depository, automated clearing house origination, wire transfers, positive pay and night depository services; merchant credit card services for the deposit and immediate credit of sales drafts; remote deposit capture services; and online mortgage application and consumer deposit account opening services. Further, the company provides business checking accounts; standby letters of credit, bank checks or money orders, and safe deposit boxes; ATM cards and services; debit cards; telephone, internet, and mobile banking services, including bill pay; and wealth management, fiduciary, and trust services. It offers retail banking services to individuals; and commercial banking services to small and medium sized business corporations, limited liability companies, partnerships, and sole proprietorships, as well as nonprofit organizations, local municipalities, and school districts. Union Bankshares, Inc. was founded in 1891 and is headquartered in Morrisville, Vermont.