Analyzing Hudson City Bancorp (HCBK) and United Community Banks (UCBI)

Hudson City Bancorp (NASDAQ: HCBK) and United Community Banks (NASDAQ:UCBI) are both commercial banks companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, earnings and valuation.

Insider & Institutional Ownership

87.5% of United Community Banks shares are owned by institutional investors. 2.2% of United Community Banks shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Hudson City Bancorp and United Community Banks’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Hudson City Bancorp N/A N/A N/A $0.23 N/A
United Community Banks $428.72 million 4.62 $100.65 million $1.48 18.24

United Community Banks has higher revenue and earnings than Hudson City Bancorp. Hudson City Bancorp 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.

Dividends

United Community Banks pays an annual dividend of $0.40 per share and has a dividend yield of 1.5%. Hudson City Bancorp does not pay a dividend. United Community Banks pays out 27.0% of its earnings in the form of a dividend.

Profitability

This table compares Hudson City Bancorp and United Community Banks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hudson City Bancorp 28.49% 2.98% 0.40%
United Community Banks 23.09% 10.31% 1.08%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Hudson City Bancorp and United Community Banks, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hudson City Bancorp 0 0 0 0 N/A
United Community Banks 0 2 4 1 2.86

United Community Banks has a consensus price target of $31.14, indicating a potential upside of 15.39%.

Summary

United Community Banks beats Hudson City Bancorp on 9 of the 11 factors compared between the two stocks.

Hudson City Bancorp Company Profile

Hudson City Bancorp, Inc. serves as the holding company of its subsidiary, Hudson City Savings Bank (the Bank). The Bank is a federal stock savings bank. The Company is a community and consumer-oriented retail savings bank offering traditional deposit products, residential real estate mortgage loans and consumer loans. In addition, it purchases residential mortgages, commercial real estate mortgages and interests in such loans and mortgage-backed securities and other securities issued by the United States government-sponsored enterprises (GSEs), as well as other investments permitted by applicable laws and regulations. The Company has two wholly owned and consolidated subsidiaries, including HudCiti Service Corporation and HC Value Broker Services, Inc.

United Community Banks Company Profile

United Community Banks, Inc. (United) is a bank holding company. United conducts its operations through a community-focused operating model of separate community banks, which, as of December 31, 2016, operated at 139 locations throughout the Atlanta-Sandy Springs-Roswell, Georgia, and Gainesville, Georgia metropolitan statistical areas, upstate and coastal South Carolina, north and coastal Georgia, western North Carolina, and east Tennessee. The community banks offer a range of retail and corporate banking services, including checking, savings and time deposit accounts, secured and unsecured loans, wire transfers, brokerage services and other financial services. The Company operates through its subsidiary, United Community Bank, Blairsville, Georgia (the Bank). The Bank owns an insurance agency, United Community Insurance Services, Inc., known as United Community Advisory Services, which is a subsidiary of the Bank.

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