National Bank of Canada (OTCMKTS:NTIOF – Get Free Report) and United Bankshares (NASDAQ:UBSI – Get Free Report) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.
Analyst Recommendations
This is a summary of current ratings and price targets for National Bank of Canada and United Bankshares, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| National Bank of Canada | 0 | 5 | 3 | 0 | 2.38 |
| United Bankshares | 0 | 4 | 3 | 0 | 2.43 |
United Bankshares has a consensus price target of $47.80, indicating a potential upside of 5.61%. Given United Bankshares’ stronger consensus rating and higher probable upside, analysts clearly believe United Bankshares is more favorable than National Bank of Canada.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| National Bank of Canada | 17.22% | 16.67% | 0.85% |
| United Bankshares | 27.97% | 9.39% | 1.53% |
Institutional and Insider Ownership
0.1% of National Bank of Canada shares are owned by institutional investors. Comparatively, 70.8% of United Bankshares shares are owned by institutional investors. 0.3% of National Bank of Canada shares are owned by company insiders. Comparatively, 3.2% of United Bankshares shares are owned 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.
Earnings and Valuation
This table compares National Bank of Canada and United Bankshares”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| National Bank of Canada | $21.96 billion | 2.38 | $2.87 billion | $8.63 | 15.87 |
| United Bankshares | $1.82 billion | 3.39 | $464.60 million | $3.67 | 12.33 |
National Bank of Canada has higher revenue and earnings than United Bankshares. United Bankshares is trading at a lower price-to-earnings ratio than National Bank of Canada, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
National Bank of Canada has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500. Comparatively, United Bankshares has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500.
Dividends
National Bank of Canada pays an annual dividend of $3.81 per share and has a dividend yield of 2.8%. United Bankshares pays an annual dividend of $1.52 per share and has a dividend yield of 3.4%. National Bank of Canada pays out 44.1% of its earnings in the form of a dividend. United Bankshares pays out 41.4% 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 26 consecutive years. United Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
United Bankshares beats National Bank of Canada on 10 of the 16 factors compared between the two stocks.
About National Bank of Canada
National Bank of Canada provides financial services to individuals, businesses, institutional clients, and governments in Canada and internationally. It operates through four segments: Personal and Commercial, Wealth Management, Financial Markets, and U.S. Specialty Finance and International. The Personal and Commercial segment offers personal banking services, including transaction solutions, mortgage loans and home equity lines of credit, consumer loans, payment solutions, and savings and investment solutions; various insurance products; and commercial banking services, such as credit, and deposit, investment solutions, international trade, foreign exchange transactions, payroll, cash management, insurance, electronic transactions, and complimentary services. The Wealth Management segment provides full-service brokerage, private banking, direct brokerage, investment solutions, administrative and trade execution, transaction products, and trust and estate services. The Financial Markets segment offers corporate banking, advisory, and capital markets services; and project financing, debt, and equity underwriting; advisory services in the areas of mergers and acquisitions, and financing. The U.S. Specialty Finance and International segment provides specialty finance products; and personal and commercial banking in Cambodia. National Bank of Canada was founded in 1859 and is headquartered in Montreal, Canada.
About United Bankshares
United Bankshares, Inc., through its subsidiaries, 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. Its loan products include commercial loans and leases to small to mid-size industrial and commercial companies; construction and real estate loans, such as commercial and residential mortgages, and loans secured by owner-occupied real estate; personal, student, credit card receivables, personal, commercial, and floor plan loans; 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 well as investment management and retirement planning services. United Bankshares, Inc. was incorporated in 1982 and is headquartered in Charleston, West Virginia.
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