Contrasting HDFC Bank (NYSE:HDB) and United Bankshares (NASDAQ:UBSI)

United Bankshares (NASDAQ:UBSI) and HDFC Bank (NYSE:HDB) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.

Earnings and Valuation

This table compares United Bankshares and HDFC Bank”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Bankshares	$1.82 billion	3.52	$464.60 million	$3.67	12.83
HDFC Bank	$54.16 billion	2.21	$7.51 billion	$1.70	13.75

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

Dividends

United Bankshares pays an annual dividend of $1.52 per share and has a dividend yield of 3.2%. HDFC Bank pays an annual dividend of $0.34 per share and has a dividend yield of 1.5%. United Bankshares pays out 41.4% of its earnings in the form of a dividend. HDFC Bank pays out 20.0% 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. 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.

Volatility and Risk

United Bankshares has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, HDFC Bank has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for United Bankshares and HDFC Bank, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Bankshares	0	4	3	0	2.43
HDFC Bank	1	2	1	0	2.00

United Bankshares presently has a consensus target price of $47.80, suggesting a potential upside of 1.52%. HDFC Bank has a consensus target price of $26.10, suggesting a potential upside of 11.66%. Given HDFC Bank’s higher possible upside, analysts clearly believe HDFC Bank is more favorable than United Bankshares.

Insider & Institutional Ownership

70.8% of United Bankshares shares are owned by institutional investors. Comparatively, 17.6% of HDFC Bank shares are owned by institutional investors. 3.2% of United Bankshares shares are owned by company insiders. Comparatively, 1.0% of HDFC Bank shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares United Bankshares and HDFC Bank’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%
HDFC Bank	15.96%	11.84%	1.64%

Summary

United Bankshares beats HDFC Bank on 10 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 HDFC Bank

HDFC Bank Limited provides banking and financial services to individuals and businesses in India, Bahrain, Hong Kong, and Dubai. The company operates in three segments: Wholesale Banking, Retail Banking, and Treasury Services. It accepts savings, salary, current, rural, public provident fund, pension, and demat accounts; fixed and recurring deposits; and safe deposit lockers, as well as offshore accounts and deposits, and overdrafts against fixed deposits. The company also provides personal, home, car, two-wheeler, business, doctor, educational, gold, consumer, and rural loans; loans against properties, securities, fixed deposits, rental receivables, and assets; loans for professionals; government sponsored programs; and loans on credit card, as well as working capital and commercial/construction equipment finance, healthcare/medical equipment and commercial vehicle finance, dealer finance, and term loans. In addition, it offers credit, debit, prepaid, and forex cards; payment and collection, export, import, remittance, bank guarantee, letter of credit, trade, hedging, and merchant and cash management services; insurance and investment products. Further, the company provides short term finance, bill discounting, structured finance, export credit, loan repayment, and documents collection services; online and wholesale, mobile, and phone banking services; unified payment interface, immediate payment, national electronic funds transfer, and real time gross settlement services; and channel financing, vendor financing, reimbursement account, money market, derivatives, employee trusts, cash surplus corporates, tax payment, and bankers to rights/public issue services, as well as financial solutions for supply chain partners and agricultural customers. It operates branches and automated teller machines in various cities/towns. The company was incorporated in 1994 and is headquartered in Mumbai, India.