First Business Financial Services (NASDAQ:FBIZ) versus UMB Financial (NASDAQ:UMBF) Head to Head Analysis

UMB Financial (NASDAQ:UMBF) and First Business Financial Services (NASDAQ:FBIZ) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, dividends, risk, institutional ownership, analyst recommendations, earnings and profitability.

Institutional and Insider Ownership

87.8% of UMB Financial shares are held by institutional investors. Comparatively, 60.1% of First Business Financial Services shares are held by institutional investors. 5.5% of UMB Financial shares are held by insiders. Comparatively, 5.1% of First Business Financial Services shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

UMB Financial has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500. Comparatively, First Business Financial Services has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for UMB Financial and First Business Financial Services, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UMB Financial	0	2	10	2	3.00
First Business Financial Services	0	0	4	0	3.00

UMB Financial presently has a consensus price target of $141.18, indicating a potential upside of 27.91%. First Business Financial Services has a consensus price target of $67.00, indicating a potential upside of 28.92%. Given First Business Financial Services’ higher probable upside, analysts clearly believe First Business Financial Services is more favorable than UMB Financial.

Dividends

UMB Financial pays an annual dividend of $1.72 per share and has a dividend yield of 1.6%. First Business Financial Services pays an annual dividend of $1.36 per share and has a dividend yield of 2.6%. UMB Financial pays out 18.8% of its earnings in the form of a dividend. First Business Financial Services pays out 22.9% 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 raised its dividend for 32 consecutive years and First Business Financial Services has raised its dividend for 13 consecutive years.

Profitability

This table compares UMB Financial and First Business Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UMB Financial	16.90%	12.14%	1.19%
First Business Financial Services	18.02%	14.77%	1.25%

Earnings & Valuation

This table compares UMB Financial and First Business Financial Services”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UMB Financial	$4.14 billion	2.03	$702.40 million	$9.13	12.09
First Business Financial Services	$279.25 million	1.55	$50.32 million	$5.95	8.73

UMB Financial has higher revenue and earnings than First Business Financial Services. First Business Financial Services is trading at a lower price-to-earnings ratio than UMB Financial, indicating that it is currently the more affordable of the two stocks.

Summary

UMB Financial beats First Business Financial Services on 12 of the 17 factors compared between the two stocks.

About UMB Financial

UMB Financial Corporation operates as the bank holding company that provides banking services and asset servicing in the United States and internationally. The Commercial Banking segment provides commercial loans and credit card; commercial real estate financing; letters of credit; loan syndication, and consultative service; various business solutions including asset-based lending, mezzanine debt, and minority equity investment; and treasury management service, such as depository service, account reconciliation, cash management tool, accounts payable and receivable solution, electronic fund transfer and automated payment, controlled disbursement, lockbox service, and remote deposit capture service. The Institutional Banking segment offers fund, asset management, and healthcare service to institutional clients; and fund administration and accounting, investor service and transfer agency, mutual fund service, alternative investment service, fixed income sale, trading and underwriting, and corporate trust and escrow service, as well as institutional custody service. This segment also provides healthcare payment solution includes custodial service for health saving accounts and private label, multipurpose debit cards to insurance carriers, third-party administrator, software companies, employers, and financial institutions. The Personal Banking segment offers deposit account, retail credit card, private banking, installment loan, home equity line of credit, residential mortgage, as well as internet banking, ATM network, private banking, brokerage and insurance service, and investment advisory, custody, and trust services. It operates through a network of branches and offices. The company was founded in 1913 and is headquartered in Kansas City, Missouri.

About First Business Financial Services

First Business Financial Services, Inc. operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals in Wisconsin, Kansas, and Missouri. The company offers real estate lending, commercial and industrial lending, asset-based lending, accounts receivable financing, equipment financing loans and leases, floorplan financing, vendor financing, small business administration lending and servicing, treasury management solutions, and company retirement services. It also provides private wealth management for individuals, including creating and executing asset allocation strategies, trust and estate administration, financial planning, investment management, and access to brokerage and custody-only services. In addition, the company offers bank consulting consisting of investment portfolio administrative and asset liability management services, and commercial deposit accounts. The company was founded in 1909 and is headquartered in Madison, Wisconsin.