S&T Bancorp (NASDAQ:STBA) & UMB Financial (NASDAQ:UMBF) Critical Contrast

UMB Financial (NASDAQ:UMBF) and S&T Bancorp (NASDAQ:STBA) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, valuation, institutional ownership, earnings and dividends.

Dividends

UMB Financial pays an annual dividend of $2.00 per share and has a dividend yield of 1.5%. S&T Bancorp pays an annual dividend of $1.48 per share and has a dividend yield of 2.9%. UMB Financial pays out 16.7% of its earnings in the form of a dividend. S&T Bancorp pays out 39.4% 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. UMB Financial has raised its dividend for 32 consecutive years and S&T Bancorp has raised its dividend for 13 consecutive years.

Insider and Institutional Ownership

87.8% of UMB Financial shares are owned by institutional investors. Comparatively, 65.2% of S&T Bancorp shares are owned by institutional investors. 5.3% of UMB Financial shares are owned by company insiders. Comparatively, 1.2% of S&T Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings for UMB Financial and S&T Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UMB Financial	0	4	11	1	2.81
S&T Bancorp	0	4	2	1	2.57

UMB Financial presently has a consensus price target of $167.93, indicating a potential upside of 24.84%. S&T Bancorp has a consensus price target of $51.60, indicating a potential upside of 2.85%. Given UMB Financial’s stronger consensus rating and higher probable upside, research analysts clearly believe UMB Financial is more favorable than S&T Bancorp.

Profitability

This table compares UMB Financial and S&T Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UMB Financial	21.64%	13.41%	1.38%
S&T Bancorp	24.51%	9.74%	1.42%

Valuation and Earnings

This table compares UMB Financial and S&T Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UMB Financial	$4.14 billion	2.47	$702.40 million	$12.01	11.20
S&T Bancorp	$568.51 million	3.11	$134.23 million	$3.76	13.34

UMB Financial has higher revenue and earnings than S&T Bancorp. UMB Financial is trading at a lower price-to-earnings ratio than S&T Bancorp, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

UMB Financial has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500. Comparatively, S&T Bancorp has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500.

Summary

UMB Financial beats S&T Bancorp on 11 of the 17 factors compared between the two stocks.

About UMB Financial

UMB Financial Corporation operates as the bank holding company that provides banking services and asset servicing in the United States and internationally. The Commercial Banking segment provides commercial loans and credit card; commercial real estate financing; letters of credit; loan syndication, and consultative service; various business solutions including asset-based lending, mezzanine debt, and minority equity investment; and treasury management service, such as depository service, account reconciliation, cash management tool, accounts payable and receivable solution, electronic fund transfer and automated payment, controlled disbursement, lockbox service, and remote deposit capture service. The Institutional Banking segment offers fund, asset management, and healthcare service to institutional clients; and fund administration and accounting, investor service and transfer agency, mutual fund service, alternative investment service, fixed income sale, trading and underwriting, and corporate trust and escrow service, as well as institutional custody service. This segment also provides healthcare payment solution includes custodial service for health saving accounts and private label, multipurpose debit cards to insurance carriers, third-party administrator, software companies, employers, and financial institutions. The Personal Banking segment offers deposit account, retail credit card, private banking, installment loan, home equity line of credit, residential mortgage, as well as internet banking, ATM network, private banking, brokerage and insurance service, and investment advisory, custody, and trust services. It operates through a network of branches and offices. The company was founded in 1913 and is headquartered in Kansas City, Missouri.

About S&T Bancorp

S&T Bancorp, Inc. is a bank holding company, which engages in the provision of consumer, commercial, and small business banking services. It operates through the following segments: Commercial Real Estate, Commercial and Industrial, Commercial Construction, Business Banking, Consumer Real Estate, and Other Consumer. The Commercial Real Estate segment includes both owner-occupied properties and investment properties for various purposes such as hotels, retail, multifamily and health care. The Commercial and Industrial segment focuses on the companies or manufacturers for the purpose of production, operating capacity, accounts receivable, inventory or equipment financing. The Commercial Construction segment refers to the finance construction of buildings or other structures, as well as to finance the acquisition and development of raw land for various purposes. The Business Banking segment is made to small businesses that are standard, non-complex products evaluated through a streamlined credit approval process that has been designed to maximize efficiency while maintaining high credit quality standards. The Consumer Real Estate segment offers first and second liens such as 1-4 family residential mortgages, home equity loans and home equity lines of credit. The Other Consumer segment consists of individuals that may be secured by assets other than 1-4 family residences, as well as unsecured loans. The company was founded on March 17, 1983 and is headquartered in Indiana, PA.