Critical Survey: United Community Banks (UCBI) vs. QCR (QCRH)

United Community Banks (NASDAQ: UCBI) and QCR (NASDAQ:QCRH) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, valuation and risk.

Dividends

United Community Banks pays an annual dividend of $0.40 per share and has a dividend yield of 1.4%. QCR pays an annual dividend of $0.20 per share and has a dividend yield of 0.4%. United Community Banks pays out 27.0% of its earnings in the form of a dividend. QCR pays out 7.8% 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.

Volatility & Risk

United Community Banks has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, QCR has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for United Community Banks and QCR, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Community Banks 0 2 3 1 2.83
QCR 0 0 3 0 3.00

United Community Banks presently has a consensus target price of $31.00, indicating a potential upside of 9.04%. QCR has a consensus target price of $52.67, indicating a potential upside of 18.22%. Given QCR’s stronger consensus rating and higher probable upside, analysts plainly believe QCR is more favorable than United Community Banks.

Earnings and Valuation

This table compares United Community Banks and QCR’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
United Community Banks $428.72 million 4.87 $100.65 million $1.48 19.21
QCR $137.51 million 4.50 $27.68 million $2.55 17.47

United Community Banks has higher revenue and earnings than QCR. QCR 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.

Profitability

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

Net Margins Return on Equity Return on Assets
United Community Banks 23.09% 10.31% 1.08%
QCR 21.78% 11.78% 1.02%

Insider & Institutional Ownership

87.7% of United Community Banks shares are held by institutional investors. Comparatively, 59.7% of QCR shares are held by institutional investors. 2.2% of United Community Banks shares are held by insiders. Comparatively, 8.8% of QCR shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

United Community Banks beats QCR on 10 of the 16 factors compared between the two stocks.

About United Community Banks

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) and Four Oaks Bank & Trust Company. The Bank owns an insurance agency, United Community Insurance Services, Inc., known as United Community Advisory Services, which is a subsidiary of the Bank.

About QCR

QCR Holdings, Inc. is a multi-bank holding company. The Company serves the Quad Cities, Cedar Rapids, Waterloo/Cedar Falls, Des Moines/Ankeny and Rockford communities through its banking subsidiaries, Quad City Bank and Trust Company (QCBT), Cedar Rapids Bank and Trust Company (CRBT), Community State Bank (CSB), Rockford Bank and Trust Company (RB&T), and Guaranty Bank and Trust Company, which provide full-service commercial and consumer banking and trust and asset management services. It is also engaged in direct financing lease contracts through m2 Lease Funds, LLC (m2), a subsidiary of QCBT. Its principal business consists of attracting deposits and investing those deposits in loans/leases and securities. The Company and its subsidiaries provide a range of commercial and retail lending/leasing, and investment services to corporations, partnerships, individuals and government agencies. It offers a range of loans, including one- to four-family residential loans and multi-family loans.

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