UMB Financial (UMBF) vs. Bank of America (BAC) Head-To-Head Analysis

UMB Financial (NASDAQ:UMBF) and Bank of America (NYSE:BAC) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, institutional ownership, analyst recommendations and profitability.

Profitability

This table compares UMB Financial and Bank of America’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
UMB Financial 17.25% 9.12% 0.93%
Bank of America 25.45% 11.66% 1.21%

Dividends

UMB Financial pays an annual dividend of $1.20 per share and has a dividend yield of 1.8%. Bank of America pays an annual dividend of $0.60 per share and has a dividend yield of 2.0%. UMB Financial pays out 29.8% of its earnings in the form of a dividend. Bank of America pays out 23.0% 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 increased its dividend for 14 consecutive years and Bank of America has increased its dividend for 5 consecutive years. Bank of America is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent ratings and target prices for UMB Financial and Bank of America, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
UMB Financial 0 2 2 0 2.50
Bank of America 0 7 7 0 2.50

UMB Financial presently has a consensus price target of $73.67, indicating a potential upside of 9.84%. Bank of America has a consensus price target of $33.30, indicating a potential upside of 13.65%. Given Bank of America’s higher probable upside, analysts clearly believe Bank of America is more favorable than UMB Financial.

Valuation and Earnings

This table compares UMB Financial and Bank of America’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
UMB Financial $1.13 billion 2.90 $195.51 million $4.03 16.64
Bank of America $110.58 billion 2.71 $28.15 billion $2.61 11.23

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

Institutional & Insider Ownership

88.6% of UMB Financial shares are held by institutional investors. Comparatively, 64.2% of Bank of America shares are held by institutional investors. 10.3% of UMB Financial shares are held by company insiders. Comparatively, 0.1% of Bank of America shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

UMB Financial has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500. Comparatively, Bank of America has a beta of 1.49, suggesting that its stock price is 49% more volatile than the S&P 500.

Summary

Bank of America beats UMB Financial on 10 of the 16 factors compared between the two stocks.

UMB Financial Company Profile

UMB Financial Corporation, a bank holding company, provides various banking and other financial services. It operates through two segments, Bank and Asset Servicing. The Bank segment offers a range of banking services to commercial, retail, government, and correspondent bank customers through its branches, call center, Internet banking, and ATM network. Its services comprise traditional commercial and consumer banking, treasury management, leasing, foreign exchange, merchant bankcard, wealth management, brokerage, insurance, capital markets, investment banking, corporate trust, and correspondent banking. The Asset Servicing segment provides services to the asset management industry, including a range of investment products, such as mutual funds, alternative investments, and managed accounts. Its services include fund administration, fund accounting, investor services, transfer agency, distribution, marketing, custody, alternative investment services, and collective and multiple-series trust services. The company operates through a network of branches and offices in the states of Missouri, Kansas, Colorado, Illinois, Oklahoma, Texas, Arizona, Nebraska, Pennsylvania, South Dakota, Indiana, Utah, Minnesota, California, and Wisconsin. The company was founded in 1913 and is headquartered in Kansas City, Missouri.

Bank of America Company Profile

Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small- and middle-market businesses, institutional investors, large corporations, and governments worldwide. It operates through four segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, and Global Markets. The Consumer Banking segment offers traditional and money market savings accounts, CDs and IRAs, noninterest- and interest-bearing checking accounts, and investment accounts and products; and credit and debit cards, residential mortgages, and home equity loans, as well as direct and indirect loans, such as automotive, recreational vehicle, and consumer personal loans. This segment provides its products and services through approximately 4,500 financial centers; 16,000 ATMs; call centers; and digital banking platforms. The GWIM segment offers investment management, brokerage, banking, and trust and retirement products; and wealth management solutions targeted to high net worth and ultra high net worth clients, as well as customized solutions to meet clients' wealth structuring, investment management, and trust and banking needs, including specialty asset management services. The Global Banking segment provides lending products and services, including commercial loans, leases, commitment facilities, trade finance, and real estate and asset-based lending; treasury solutions, such as treasury management, foreign exchange, and short-term investing options; working capital management solutions; and debt and equity underwriting and distribution, and merger-related and other advisory services. The Global Markets segment offers market-making, financing, securities clearing, settlement, and custody services, as well as risk management, foreign exchange, fixed-income, and mortgage-related products. Bank of America Corporation was founded in 1874 and is based in Charlotte, North Carolina.

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