Analyzing South State (SSB) and United Bankshares (UBSI)

South State (NASDAQ:SSB) and United Bankshares (NASDAQ:UBSI) are both mid-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Analyst Ratings

This is a summary of current ratings for South State and United Bankshares, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
South State 0 4 1 0 2.20
United Bankshares 0 3 0 0 2.00

South State presently has a consensus price target of $86.25, indicating a potential upside of 29.00%. United Bankshares has a consensus price target of $38.00, indicating a potential upside of 12.03%. Given South State’s stronger consensus rating and higher probable upside, equities analysts plainly believe South State is more favorable than United Bankshares.

Insider and Institutional Ownership

76.5% of South State shares are owned by institutional investors. Comparatively, 70.9% of United Bankshares shares are owned by institutional investors. 2.0% of South State shares are owned by company insiders. Comparatively, 5.2% of United Bankshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

South State has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500. Comparatively, United Bankshares has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.

Dividends

South State pays an annual dividend of $1.44 per share and has a dividend yield of 2.2%. United Bankshares pays an annual dividend of $1.36 per share and has a dividend yield of 4.0%. South State pays out 29.7% of its earnings in the form of a dividend. United Bankshares pays out 71.6% 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. South State has raised its dividend for 3 consecutive years.

Profitability

This table compares South State and United Bankshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
South State 19.08% 8.32% 1.34%
United Bankshares 25.09% 7.64% 1.30%

Earnings and Valuation

This table compares South State and United Bankshares’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
South State $575.15 million 4.25 $87.55 million $4.85 13.79
United Bankshares $755.45 million 4.63 $150.58 million $1.90 17.85

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

Summary

South State beats United Bankshares on 9 of the 17 factors compared between the two stocks.

South State Company Profile

South State Corporation operates as the bank holding company for South State Bank that provides a range of retail and commercial banking services, mortgage lending services, trust and wealth management, and consumer finance loans. The company accepts demand deposits, savings deposits, interest-bearing transaction accounts, certificates of deposit, and other time deposits; and offers lending and credit card, ATM processing, and wealth management and trust services. It serves customers through 181 financial centers in 29 South Carolina counties, 9 North Carolina counties, 19 Georgia counties, and 4 Virginia counties. The company was formerly known as First Financial Holdings, Inc. and changed its name to South State Corporation in July 2013. South State Corporation was founded in 1933 and is headquartered in Columbia, South Carolina.

United Bankshares Company Profile

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 NOW accounts. It also offers personal, commercial, floor plan, and student loans; construction and real estate loans; and consumer loans, including credit card and home equity loans. In addition, the company provides safe deposit boxes, wire transfers, and other banking products and services; investment and security, and trust services; services to correspondent banks, including check clearing, safekeeping, and 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. The company operates 142 full service offices, which consists of 51 offices in West Virginia; 86 offices in the Shenandoah Valley region of Virginia and the Northern Virginia, Maryland, and Washington, D.C. metropolitan areas; 4 offices in southwestern Pennsylvania; and 1 office in southeastern Ohio. United Bankshares, Inc. was incorporated in 1982 and is headquartered in Charleston, West Virginia.

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