United Community Banks (NYSE:UCB) versus NatWest Group (NYSE:NWG) Head-To-Head Analysis

United Community Banks (NYSE:UCB) and NatWest Group (NYSE:NWG) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, dividends, institutional ownership, risk and profitability.

Analyst Recommendations

This is a breakdown of recent ratings for United Community Banks and NatWest Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Community Banks	0	2	4	2	3.00
NatWest Group	0	3	6	1	2.80

United Community Banks presently has a consensus target price of $40.00, indicating a potential upside of 6.61%. Given United Community Banks’ stronger consensus rating and higher possible upside, research analysts clearly believe United Community Banks is more favorable than NatWest Group.

Dividends

United Community Banks pays an annual dividend of $1.04 per share and has a dividend yield of 2.8%. NatWest Group pays an annual dividend of $0.63 per share and has a dividend yield of 4.0%. United Community Banks pays out 88.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NatWest Group pays out 31.5% of its earnings in the form of a dividend. NatWest Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

82.3% of United Community Banks shares are owned by institutional investors. Comparatively, 1.3% of NatWest Group shares are owned by institutional investors. 0.5% of United Community Banks shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
United Community Banks	9.06%	9.66%	1.23%
NatWest Group	19.61%	13.75%	0.80%

Risk and Volatility

United Community Banks has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500. Comparatively, NatWest Group has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500.

Valuation & Earnings

This table compares United Community Banks and NatWest Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Community Banks	$1.54 billion	2.94	$328.10 million	$1.18	31.80
NatWest Group	$38.91 billion	1.61	$7.69 billion	$2.00	7.91

NatWest Group has higher revenue and earnings than United Community Banks. NatWest Group 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.

Summary

NatWest Group beats United Community Banks on 9 of the 17 factors compared between the two stocks.

About United Community Banks

United Community Banks, Inc. operates as the financial holding company for United Community Bank that provides financial products and services to commercial, retail, government, education, energy, health care, and real estate sectors. The company accepts various deposit products, including checking, savings, money market, and other deposit accounts. It also offers lending services, including real estate, consumer, and commercial loans, to individuals, small businesses, mid-sized commercial businesses, and non-profit organizations, as well as secured and unsecured, and mortgage loans. In addition, the company originate loans partially guaranteed by the SBA and USDA loan programs. Further, it provides wealth management services comprising financial planning, customized portfolio management, and investment advice; trust services to manage fiduciary assets; non-deposit investment products; and insurance products, including life insurance, long-term care insurance, and tax-deferred annuities, as well as invests in residential and commercial mortgage-backed securities, asset-backed securities, the U.S. treasury, the U.S. agency, and municipal obligations. Additionally, the company offers reinsurance on a property insurance contract; insurance agency services; brokerage services; and payment processing, merchant, wire transfer, private banking, and other related financial services. It operates through a network of 171 branches in Florida, Georgia, North Carolina, South Carolina, and Tennessee. United Community Banks, Inc. was founded in 1950 and is headquartered in Blairsville, Georgia.

About NatWest Group

NatWest Group plc, together with its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers in the United Kingdom and internationally. It operates through Retail Banking, Private Banking, and Commercial & Institutional segments. The Retail Banking segment offers a range of banking products and related financial services, such as current accounts, mortgages, personal unsecured lending, and personal deposits, as well as mobile and online banking services. The Private Banking segment provides private banking and wealth management products for high-net-worth individuals and their business interests. The Commercial & Institutional segment offers banking and financial solutions to large corporate organisations, multi-nationals, and financial institutions. The company was formerly known as The Royal Bank of Scotland Group plc and changed its name to NatWest Group plc in July 2020. NatWest Group plc was founded in 1727 and is headquartered in Edinburgh, the United Kingdom.