United Community Banks (NASDAQ:UCBI) and The Bank of Nova Scotia (NYSE:BNS) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, institutional ownership, valuation and dividends.
Insider and Institutional Ownership
89.4% of United Community Banks shares are owned by institutional investors. Comparatively, 45.5% of The Bank of Nova Scotia shares are owned by institutional investors. 0.6% of United Community Banks shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
United Community Banks has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500. Comparatively, The Bank of Nova Scotia has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.
Earnings & Valuation
This table compares United Community Banks and The Bank of Nova Scotia’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|United Community Banks||$714.10 million||3.41||$164.09 million||$1.98||14.18|
|The Bank of Nova Scotia||$32.52 billion||2.24||$5.04 billion||$3.99||15.04|
The Bank of Nova Scotia has higher revenue and earnings than United Community Banks. United Community Banks is trading at a lower price-to-earnings ratio than The Bank of Nova Scotia, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings for United Community Banks and The Bank of Nova Scotia, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|United Community Banks||0||0||2||0||3.00|
|The Bank of Nova Scotia||0||4||7||0||2.64|
United Community Banks presently has a consensus price target of $29.75, suggesting a potential upside of 5.99%. The Bank of Nova Scotia has a consensus price target of $85.97, suggesting a potential upside of 43.28%. Given The Bank of Nova Scotia’s higher possible upside, analysts clearly believe The Bank of Nova Scotia is more favorable than United Community Banks.
United Community Banks pays an annual dividend of $0.80 per share and has a dividend yield of 2.9%. The Bank of Nova Scotia pays an annual dividend of $2.90 per share and has a dividend yield of 4.8%. United Community Banks pays out 40.4% of its earnings in the form of a dividend. The Bank of Nova Scotia pays out 72.7% 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 Community Banks has raised its dividend for 1 consecutive years and The Bank of Nova Scotia has raised its dividend for 1 consecutive years.
This table compares United Community Banks and The Bank of Nova Scotia’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|United Community Banks||33.15%||13.28%||1.41%|
|The Bank of Nova Scotia||22.86%||13.87%||0.80%|
About United Community Banks
United Community Banks, Inc. is a bank holding company, which engages in the provision of consumer and business banking services. The firm caters on individuals and small and medium-sized businesses. It offers checking, savings, mortgages, borrowing, digital baking, credit cards, and investing services. The company was founded in 1950 and is headquartered in Blairsville, GA.
About The Bank of Nova Scotia
The Bank of Nova Scotia engages in the provision of financial products and services, including personal, commercial, corporate, and investment banking. It operates through the following segments: Canadian Banking, International Banking, Global Banking and Markets, and Other. The Other segment includes group treasury, smaller operating segments and business line elimination items. The company was founded on March 30, 1832 and is headquartered in Toronto, Canada.
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