Analyzing Truist Financial (NYSE:TFC) and United Community Banks (NYSE:UCB)

Truist Financial (NYSE:TFC) and United Community Banks (NYSE:UCB) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, dividends and valuation.

Valuation & Earnings

This table compares Truist Financial and United Community Banks”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Truist Financial	$30.44 billion	1.95	$5.31 billion	$4.36	11.13
United Community Banks	$1.54 billion	2.72	$328.10 million	$3.04	11.42

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

Risk and Volatility

Truist Financial has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, United Community Banks has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500.

Dividends

Truist Financial pays an annual dividend of $2.08 per share and has a dividend yield of 4.3%. United Community Banks pays an annual dividend of $1.04 per share and has a dividend yield of 3.0%. Truist Financial pays out 47.7% of its earnings in the form of a dividend. United Community Banks pays out 34.2% 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.

Insider and Institutional Ownership

71.3% of Truist Financial shares are owned by institutional investors. Comparatively, 82.3% of United Community Banks shares are owned by institutional investors. 0.2% of Truist Financial shares are owned by company insiders. Comparatively, 0.5% of United Community Banks shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Truist Financial and United Community Banks, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Truist Financial	2	8	7	0	2.29
United Community Banks	0	3	4	1	2.75

Truist Financial currently has a consensus price target of $55.12, suggesting a potential upside of 13.60%. United Community Banks has a consensus price target of $39.60, suggesting a potential upside of 14.08%. Given United Community Banks’ stronger consensus rating and higher possible upside, analysts plainly believe United Community Banks is more favorable than Truist Financial.

Profitability

This table compares Truist Financial and United Community Banks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Truist Financial	19.13%	10.06%	1.09%
United Community Banks	24.43%	9.61%	1.24%

Summary

United Community Banks beats Truist Financial on 10 of the 17 factors compared between the two stocks.

About Truist Financial

Truist Financial Corporation, a financial services company, provides banking and trust services in the Southeastern and Mid-Atlantic United States. The company operates through three segments: Consumer Banking and Wealth, Corporate and Commercial Banking, and Insurance Holdings.Its deposit products include noninterest-bearing checking, interest-bearing checking, savings, and money market deposit accounts, as well as certificates of deposit and individual retirement accounts. The company also provides funding; asset management; automobile lending; credit card lending; consumer finance; home equity and mortgage lending; other direct retail lending; insurance; investment brokerage; mobile/online banking; payment solutions; point-of-sale lending; retail and small business deposit products; small business lending; and wealth management/private banking services. In addition, it offers asset based lending, investment banking and capital market, institutional trust, insurance premium finance, derivatives, commercial lending, international banking, leasing, merchant, commercial deposit and treasury, floor plan, mortgage warehouse lending, real estate lending, and supply chain financing services. Further, the company provides insurance brokerage, retail and wholesale brokerage, securities underwriting and market making, loan syndication, and investment management and advisory services. The company was formerly known as BB&T Corporation and changed its name to Truist Financial Corporation in December 2019. Truist Financial Corporation was founded in 1872 and is headquartered in Charlotte, North Carolina.

About United Community Banks

United Community Banks, Inc. operates as the financial holding company for United Community Bank that provides financial products and services to commercial, retail, government, education, energy, health care, and real estate sectors. The company accepts various deposit products, including checking, savings, money market, and other deposit accounts. It also offers lending services, including real estate, consumer, and commercial loans, to individuals, small businesses, mid-sized commercial businesses, and non-profit organizations, as well as secured and unsecured, and mortgage loans. In addition, the company originate loans partially guaranteed by the SBA and USDA loan programs. Further, it provides wealth management services comprising financial planning, customized portfolio management, and investment advice; trust services to manage fiduciary assets; non-deposit investment products; and insurance products, including life insurance, long-term care insurance, and tax-deferred annuities, as well as invests in residential and commercial mortgage-backed securities, asset-backed securities, the U.S. treasury, the U.S. agency, and municipal obligations. Additionally, the company offers reinsurance on a property insurance contract; insurance agency services; brokerage services; and payment processing, merchant, wire transfer, private banking, and other related financial services. It operates through a network of 171 branches in Florida, Georgia, North Carolina, South Carolina, and Tennessee. United Community Banks, Inc. was founded in 1950 and is headquartered in Blairsville, Georgia.