Critical Comparison: Lloyds Banking Group (NYSE:LYG) versus United Bankshares (NASDAQ:UBSI)

United Bankshares (NASDAQ:UBSI) and Lloyds Banking Group (NYSE:LYG) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, risk, earnings, profitability, analyst recommendations, dividends and valuation.

Profitability

This table compares United Bankshares and Lloyds Banking Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Bankshares	27.97%	9.39%	1.53%
Lloyds Banking Group	24.97%	10.94%	0.54%

Volatility & Risk

United Bankshares has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500. Comparatively, Lloyds Banking Group has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500.

Valuation & Earnings

This table compares United Bankshares and Lloyds Banking Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Bankshares	$1.82 billion	3.48	$464.60 million	$3.67	12.68
Lloyds Banking Group	$25.61 billion	3.28	$6.14 billion	$0.43	13.46

Lloyds Banking Group has higher revenue and earnings than United Bankshares. United Bankshares is trading at a lower price-to-earnings ratio than Lloyds Banking Group, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

70.8% of United Bankshares shares are held by institutional investors. Comparatively, 2.1% of Lloyds Banking Group shares are held by institutional investors. 3.2% of United Bankshares shares are held by insiders. Comparatively, 0.0% of Lloyds Banking Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

United Bankshares pays an annual dividend of $1.52 per share and has a dividend yield of 3.3%. Lloyds Banking Group pays an annual dividend of $0.17 per share and has a dividend yield of 2.9%. United Bankshares pays out 41.4% of its earnings in the form of a dividend. Lloyds Banking Group pays out 39.5% 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. United Bankshares has raised its dividend for 26 consecutive years. United Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings for United Bankshares and Lloyds Banking Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Bankshares	0	4	3	0	2.43
Lloyds Banking Group	0	3	8	0	2.73

United Bankshares presently has a consensus target price of $47.80, suggesting a potential upside of 2.73%. Given United Bankshares’ higher probable upside, analysts plainly believe United Bankshares is more favorable than Lloyds Banking Group.

Summary

United Bankshares beats Lloyds Banking Group on 9 of the 17 factors compared between the two stocks.

About United Bankshares

United Bankshares, Inc., through its subsidiaries, primarily provides commercial and retail banking products and services in the United States. It operates through two segments, Community Banking and Mortgage Banking. The company accepts checking, savings, and time and money market accounts; individual retirement accounts; and demand deposits, statement and special savings, and NOW accounts. Its loan products include commercial loans and leases to small to mid-size industrial and commercial companies; construction and real estate loans, such as commercial and residential mortgages, and loans secured by owner-occupied real estate; personal, student, credit card receivables, personal, commercial, and floor plan loans; and home equity loans. In addition, the company provides credit cards; safe deposit boxes, wire transfers, and other banking products and services; investment and security services; services to correspondent banks, including buying and selling federal funds; automated teller machine services; and internet and telephone banking services. Further, it offers community banking services, such as asset management, real property title insurance, financial planning, mortgage banking, and brokerage services, as well as investment management and retirement planning services. United Bankshares, Inc. was incorporated in 1982 and is headquartered in Charleston, West Virginia.

About Lloyds Banking Group

Lloyds Banking Group plc, together with its subsidiaries, provides a range of banking and financial services in the United Kingdom and internationally. It operates in three segments: Retail; Commercial Banking; and Insurance, Pensions and Investments. The Retail segment offers a range of financial service products, including current accounts, savings, mortgages, motor finance, unsecured loans, leasing solutions, and credit cards to personal customers. The Commercial Banking segment provides lending, transactional banking, working capital management, risk management, and debt financing services to small and medium-sized entities, corporates, and institutions. The Insurance, Pensions, and Investments segment offers insurance, investment, and pension management products and services. It also provides digital banking services. The company offers its products and services under the Lloyds Bank, Halifax, Bank of Scotland, Scottish Widows, MBNA, Schroders Personal Wealth, Black Horse, Lex Autolease, Birmingham Midshires, LDC, AMC, Embark Group, Citra, IWeb, Cavendish Online, and Tusker brand names. Lloyds Banking Group plc was founded in 1695 and is headquartered in London, the United Kingdom.