Head-To-Head Analysis: Webster Financial (NYSE:WBS) and Union Bankshares (NASDAQ:UNB)

Union Bankshares (NASDAQ:UNB) and Webster Financial (NYSE:WBS) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Earnings & Valuation

This table compares Union Bankshares and Webster Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Union Bankshares	$86.06 million	1.36	$11.08 million	$2.61	9.03
Webster Financial	$2.94 billion	4.27	$1.00 billion	$6.15	12.61

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Union Bankshares and Webster Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Union Bankshares	0	1	0	0	2.00
Webster Financial	1	11	3	0	2.13

Webster Financial has a consensus price target of $74.58, suggesting a potential downside of 3.86%. Given Webster Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Webster Financial is more favorable than Union Bankshares.

Dividends

Union Bankshares pays an annual dividend of $1.44 per share and has a dividend yield of 6.1%. Webster Financial pays an annual dividend of $1.60 per share and has a dividend yield of 2.1%. Union Bankshares pays out 55.2% of its earnings in the form of a dividend. Webster Financial pays out 26.0% 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.

Institutional & Insider Ownership

14.8% of Union Bankshares shares are owned by institutional investors. Comparatively, 85.6% of Webster Financial shares are owned by institutional investors. 2.1% of Union Bankshares shares are owned by insiders. Comparatively, 0.5% of Webster Financial shares are owned 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.

Risk & Volatility

Union Bankshares has a beta of 0.3, indicating that its share price is 70% less volatile than the S&P 500. Comparatively, Webster Financial has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Union Bankshares	13.50%	14.70%	0.76%
Webster Financial	22.78%	11.23%	1.23%

Summary

Webster Financial beats Union Bankshares on 13 of the 16 factors compared between the two stocks.

About Union Bankshares

Union Bankshares, Inc. operates as the bank holding company for Union Bank that provides retail, commercial, and municipal banking products and services in northern Vermont and New Hampshire. It offers retail depository services, such as personal checking, savings, money market, IRA/SEP/KEOGH, and health savings accounts, as well as certificates of deposit. The company also provides commercial real estate loans; commercial loans for plant and equipment, working capital, real estate renovation, and other business purposes to business owners and investors; small business administration guaranteed loans; residential construction and mortgage loans; municipal financing, including loans and excess deposits secured by FHLBB letters of credit; and home improvement loans and overdraft checking privileges against preauthorized lines of credit. In addition, it offers online cash management services, including account reconciliation, credit card depository, automated clearing house origination, wire transfers, positive pay and night depository services; merchant credit card services for the deposit and immediate credit of sales drafts; remote deposit capture services; and online mortgage application and consumer deposit account opening services. Further, the company provides business checking accounts; standby letters of credit, bank checks or money orders, and safe deposit boxes; ATM cards and services; debit cards; telephone, internet, and mobile banking services, including bill pay; and wealth management, fiduciary, and trust services. It offers retail banking services to individuals; and commercial banking services to small and medium sized business corporations, limited liability companies, partnerships, and sole proprietorships, as well as nonprofit organizations, local municipalities, and school districts. Union Bankshares, Inc. was founded in 1891 and is headquartered in Morrisville, Vermont.

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.