Head-To-Head Contrast: UMB Financial (NASDAQ:UMBF) vs. Webster Financial (NYSE:WBS)

UMB Financial (NASDAQ:UMBF) and Webster Financial (NYSE:WBS) are both mid-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, valuation, analyst recommendations, profitability, institutional ownership and risk.

Valuation and Earnings

This table compares UMB Financial and Webster Financial’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UMB Financial	$2.38 billion	1.69	$350.02 million	$7.53	10.96
Webster Financial	$2.65 billion	2.91	$867.84 million	$4.88	9.20

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

Analyst Ratings

This is a breakdown of current ratings and price targets for UMB Financial and Webster Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UMB Financial	0	2	3	1	2.83
Webster Financial	0	2	12	0	2.86

UMB Financial currently has a consensus target price of $92.00, indicating a potential upside of 11.43%. Webster Financial has a consensus target price of $56.23, indicating a potential upside of 25.18%. Given Webster Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Webster Financial is more favorable than UMB Financial.

Risk and Volatility

UMB Financial has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500. Comparatively, Webster Financial has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
UMB Financial	14.59%	14.30%	0.99%
Webster Financial	21.09%	12.55%	1.38%

Dividends

UMB Financial pays an annual dividend of $1.56 per share and has a dividend yield of 1.9%. Webster Financial pays an annual dividend of $1.60 per share and has a dividend yield of 3.6%. UMB Financial pays out 20.7% of its earnings in the form of a dividend. Webster Financial pays out 32.8% 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. UMB Financial has raised its dividend for 31 consecutive years.

Institutional & Insider Ownership

87.8% of UMB Financial shares are owned by institutional investors. Comparatively, 85.6% of Webster Financial shares are owned by institutional investors. 8.9% of UMB Financial shares are owned by company insiders. Comparatively, 0.9% of Webster Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Webster Financial beats UMB Financial on 10 of the 18 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 Webster Financial

Webster Financial Corporation operates as the bank holding company for Webster Bank, National Association that provides a range of financial products and services to individuals, families, and businesses in the United States. It operates through three segments: Commercial Banking, HSA Bank, and Consumer Banking. The Commercial Banking segment offers commercial real estate and equipment financing, business banking, asset-based lending, and commercial services; public sector finance; mortgage warehouse financing; sponsor and specialty financing services; credit, deposit, and cash flow management services; and wealth management solutions to business owners and operators, including trust, asset management, financial planning, insurance, retirement, and investment products, as well as treasury management services comprising derivative, treasury, accounts payable, accounts receivable, and trade products and services. This segment also provides commercial services, such as accounts receivable factoring and trade financing, payroll funding, and business process outsourcing. The HSA Bank segment offers health savings accounts, health reimbursement arrangements, flexible spending accounts, and commuter benefit services that are distributed directly to employers and individual consumers, as well as through national and regional insurance carriers, benefit consultants, and financial advisors. The Consumer Banking segment provides consumer deposit and fee-based services, residential mortgages, home equity lines, secured and unsecured loans, and credit cards to consumers; and small business banking products, such as credit, deposit, and cash flow management products to businesses and professional service firms. The company offers online and mobile banking services. Webster Financial Corporation was founded in 1935 and is headquartered in Stamford, Connecticut.