Reviewing Cadence Bank (NYSE:CADE) & United Bankshares (NASDAQ:UBSI)

Cadence Bank (NYSE:CADE) and United Bankshares (NASDAQ:UBSI) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, institutional ownership, risk and profitability.

Insider and Institutional Ownership

84.6% of Cadence Bank shares are held by institutional investors. Comparatively, 70.8% of United Bankshares shares are held by institutional investors. 2.2% of Cadence Bank shares are held by company insiders. Comparatively, 3.7% of United Bankshares shares are held by company 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.

Profitability

This table compares Cadence Bank and United Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cadence Bank	25.99%	8.95%	0.95%
United Bankshares	22.05%	7.58%	1.23%

Dividends

Cadence Bank pays an annual dividend of $1.00 per share and has a dividend yield of 2.6%. United Bankshares pays an annual dividend of $1.48 per share and has a dividend yield of 3.5%. Cadence Bank pays out 28.7% of its earnings in the form of a dividend. United Bankshares pays out 56.1% 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. Cadence Bank has increased its dividend for 13 consecutive years and United Bankshares has increased its dividend for 25 consecutive years. United Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings for Cadence Bank and United Bankshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cadence Bank	0	5	6	1	2.67
United Bankshares	0	3	1	0	2.25

Cadence Bank currently has a consensus price target of $35.29, suggesting a potential downside of 9.23%. United Bankshares has a consensus price target of $40.25, suggesting a potential downside of 5.98%. Given United Bankshares’ higher possible upside, analysts clearly believe United Bankshares is more favorable than Cadence Bank.

Volatility and Risk

Cadence Bank has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500. Comparatively, United Bankshares has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500.

Earnings & Valuation

This table compares Cadence Bank and United Bankshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cadence Bank	$2.19 billion	3.23	$542.30 million	$3.48	11.17
United Bankshares	$1.54 billion	3.77	$366.31 million	$2.64	16.22

Cadence Bank has higher revenue and earnings than United Bankshares. Cadence Bank 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

Cadence Bank beats United Bankshares on 10 of the 18 factors compared between the two stocks.

About Cadence Bank

Cadence Bank provides commercial banking and financial services. Its products and services include consumer banking, consumer loans, mortgages, home equity lines and loans, credit cards, commercial and business banking, treasury management, specialized and asset-based lending, commercial real estate, equipment financing, and correspondent banking services. The company’s products and services also comprise small business administration lending, foreign exchange, wealth management, investment and trust, financial planning, retirement plan management, and personal and business insurance services. Cadence Bank was founded in 1876 and is headquartered in Tupelo, Mississippi.

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.