Comparing UMB Financial (NASDAQ:UMBF) and First Business Financial Services (NASDAQ:FBIZ)

First Business Financial Services (NASDAQ:FBIZ) and UMB Financial (NASDAQ:UMBF) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Volatility & Risk

First Business Financial Services has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500. Comparatively, UMB Financial has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500.

Profitability

This table compares First Business Financial Services and UMB Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Business Financial Services	18.02%	14.77%	1.25%
UMB Financial	16.90%	12.14%	1.19%

Dividends

First Business Financial Services pays an annual dividend of $1.36 per share and has a dividend yield of 2.6%. UMB Financial pays an annual dividend of $1.72 per share and has a dividend yield of 1.5%. First Business Financial Services pays out 22.9% of its earnings in the form of a dividend. UMB Financial pays out 18.8% 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. First Business Financial Services has increased its dividend for 13 consecutive years and UMB Financial has increased its dividend for 32 consecutive years.

Analyst Ratings

This is a summary of current recommendations and price targets for First Business Financial Services and UMB Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Business Financial Services	0	0	4	0	3.00
UMB Financial	0	2	10	2	3.00

First Business Financial Services currently has a consensus target price of $67.00, indicating a potential upside of 25.75%. UMB Financial has a consensus target price of $141.18, indicating a potential upside of 24.40%. Given First Business Financial Services’ higher probable upside, research analysts clearly believe First Business Financial Services is more favorable than UMB Financial.

Institutional & Insider Ownership

60.1% of First Business Financial Services shares are owned by institutional investors. Comparatively, 87.8% of UMB Financial shares are owned by institutional investors. 5.1% of First Business Financial Services shares are owned by insiders. Comparatively, 5.5% of UMB Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares First Business Financial Services and UMB Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Business Financial Services	$168.63 million	2.64	$50.32 million	$5.95	8.95
UMB Financial	$4.14 billion	2.09	$702.40 million	$9.13	12.43

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

Summary

UMB Financial beats First Business Financial Services on 11 of the 17 factors compared between the two stocks.

About First Business Financial Services

First Business Financial Services, Inc. operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals in Wisconsin, Kansas, and Missouri. The company offers real estate lending, commercial and industrial lending, asset-based lending, accounts receivable financing, equipment financing loans and leases, floorplan financing, vendor financing, small business administration lending and servicing, treasury management solutions, and company retirement services. It also provides private wealth management for individuals, including creating and executing asset allocation strategies, trust and estate administration, financial planning, investment management, and access to brokerage and custody-only services. In addition, the company offers bank consulting consisting of investment portfolio administrative and asset liability management services, and commercial deposit accounts. The company was founded in 1909 and is headquartered in Madison, Wisconsin.

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.