United Bancorporation of Alabama (OTCMKTS:UBAB) versus Cadence Bank (NYSE:CADE) Head-To-Head Review

United Bancorporation of Alabama (OTCMKTS:UBAB) and Cadence Bank (NYSE:CADE) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, profitability, risk, analyst recommendations and dividends.

Profitability

This table compares United Bancorporation of Alabama and Cadence Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Bancorporation of Alabama	23.01%	15.16%	1.59%
Cadence Bank	18.79%	9.84%	1.12%

Risk and Volatility

United Bancorporation of Alabama has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500. Comparatively, Cadence Bank has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500.

Earnings and Valuation

This table compares United Bancorporation of Alabama and Cadence Bank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Bancorporation of Alabama	$97.72 million	1.86	$28.00 million	$6.35	8.79
Cadence Bank	$2.90 billion	2.37	$523.60 million	$2.81	13.42

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

Insider and Institutional Ownership

5.5% of United Bancorporation of Alabama shares are held by institutional investors. Comparatively, 84.6% of Cadence Bank shares are held by institutional investors. 2.2% of Cadence Bank shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for United Bancorporation of Alabama and Cadence Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Bancorporation of Alabama	0	0	0	0	0.00
Cadence Bank	0	5	7	0	2.58

Cadence Bank has a consensus target price of $42.00, suggesting a potential upside of 11.35%. Given Cadence Bank’s stronger consensus rating and higher possible upside, analysts plainly believe Cadence Bank is more favorable than United Bancorporation of Alabama.

Dividends

United Bancorporation of Alabama pays an annual dividend of $1.40 per share and has a dividend yield of 2.5%. Cadence Bank pays an annual dividend of $1.10 per share and has a dividend yield of 2.9%. United Bancorporation of Alabama pays out 22.0% of its earnings in the form of a dividend. Cadence Bank pays out 39.1% 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. Cadence Bank has increased its dividend for 14 consecutive years. Cadence Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Cadence Bank beats United Bancorporation of Alabama on 12 of the 17 factors compared between the two stocks.

About United Bancorporation of Alabama

United Bancorporation of Alabama, Inc. operates as the bank holding company for United Bank that provides banking services. The company offers checking and savings accounts, certificates of deposit, individual retirement accounts, small business programs, business solutions, merchant services, and cash management services. It also provides various lending services, such as personal loans, business loans, lines of credit, and equipment loans; real estate loans for the agricultural community and working lines of credit; and overdraft services. In addition, the company offers debit cards, prepaid cards, Visa credit cards, gift cards, and safe deposit boxes. Further, it provides check cashing, convenience, remote deposit, mobile check deposit, personal storage compartments, Web payment options, insurance products, investment and brokerage, and online and mobile banking services. United Bancorporation of Alabama, Inc. was founded in 1904 and is based in Atmore, Alabama.

About Cadence Bank

Cadence Bank provides commercial banking and financial services. Its products and services include consumer banking, consumer loans, mortgages, home equity lines and loans, credit cards, commercial and business banking, treasury management, specialized and asset-based lending, commercial real estate, equipment financing, and correspondent banking services. The company’s products and services also comprise small business administration lending, foreign exchange, wealth management, investment and trust, financial planning, retirement plan management, and personal and business insurance services. Cadence Bank was founded in 1876 and is headquartered in Tupelo, Mississippi.