Head to Head Review: West Bancorporation (NASDAQ:WTBA) and United Bankshares (NASDAQ:UBSI)

United Bankshares (NASDAQ:UBSI) and West Bancorporation (NASDAQ:WTBA) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, valuation, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and price targets for United Bankshares and West Bancorporation, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Bankshares	0	4	3	0	2.43
West Bancorporation	0	3	1	0	2.25

United Bankshares currently has a consensus target price of $47.80, indicating a potential upside of 1.23%. West Bancorporation has a consensus target price of $29.00, indicating a potential downside of 1.26%. Given United Bankshares’ stronger consensus rating and higher probable upside, equities research analysts clearly believe United Bankshares is more favorable than West Bancorporation.

Insider and Institutional Ownership

70.8% of United Bankshares shares are held by institutional investors. Comparatively, 44.3% of West Bancorporation shares are held by institutional investors. 3.2% of United Bankshares shares are held by company insiders. Comparatively, 4.6% of West Bancorporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

United Bankshares has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500. Comparatively, West Bancorporation has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500.

Earnings and Valuation

This table compares United Bankshares and West Bancorporation”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Bankshares	$1.82 billion	3.53	$464.60 million	$3.67	12.87
West Bancorporation	$202.45 million	2.47	$32.56 million	$2.23	13.17

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

Profitability

This table compares United Bankshares and West Bancorporation’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%
West Bancorporation	18.75%	15.48%	1.03%

Dividends

United Bankshares pays an annual dividend of $1.52 per share and has a dividend yield of 3.2%. West Bancorporation pays an annual dividend of $1.04 per share and has a dividend yield of 3.5%. United Bankshares pays out 41.4% of its earnings in the form of a dividend. West Bancorporation pays out 46.6% 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.

Summary

United Bankshares beats West Bancorporation on 12 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 West Bancorporation

West Bancorporation, Inc. operates as the financial holding company provides community banking and trust services to individuals and small- to medium-sized businesses in the United States. It offers deposit services, including checking, savings, and money market accounts, as well as time certificates of deposit. The company also provides loan products comprising commercial real estate loans, construction and land development loans, commercial lines of credit, and commercial term loans; consumer loans, including loans extended to individuals for household, family, and other personal expenditures not secured by real estate; and 1-4 family residential mortgages and home equity loans. In addition, it offers online and mobile banking, treasury management services including cash management, client-generated automated clearing house transactions, remote deposit, and fraud protection services; merchant credit card processing and corporate credit cards; and administration of estates, conservatorships, personal trusts, and agency accounts. The company was founded in 1893 and is headquartered in West Des Moines, Iowa.