Head to Head Review: Truist Financial (NYSE:TFC) and United Security Bancshares (NASDAQ:UBFO)

Truist Financial (NYSE:TFCGet Rating) and United Security Bancshares (NASDAQ:UBFOGet Rating) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, dividends, analyst recommendations, valuation, profitability, risk and institutional ownership.

Dividends

Truist Financial pays an annual dividend of $1.92 per share and has a dividend yield of 4.1%. United Security Bancshares pays an annual dividend of $0.44 per share and has a dividend yield of 5.9%. Truist Financial pays out 42.9% of its earnings in the form of a dividend. United Security Bancshares pays out 67.7% 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. Truist Financial has raised its dividend for 1 consecutive years.

Profitability

This table compares Truist Financial and United Security Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Truist Financial 27.89% 12.70% 1.45%
United Security Bancshares 26.16% 9.45% 0.86%

Volatility and Risk

Truist Financial has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500. Comparatively, United Security Bancshares has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500.

Insider & Institutional Ownership

72.8% of Truist Financial shares are owned by institutional investors. Comparatively, 37.0% of United Security Bancshares shares are owned by institutional investors. 0.3% of Truist Financial shares are owned by company insiders. Comparatively, 20.4% of United Security Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Truist Financial and United Security Bancshares’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Truist Financial $23.06 billion 2.67 $6.44 billion $4.48 10.34
United Security Bancshares $41.12 million 3.09 $10.10 million $0.65 11.46

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Truist Financial and United Security Bancshares, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Truist Financial 1 9 3 0 2.15
United Security Bancshares 0 0 0 0 N/A

Truist Financial presently has a consensus target price of $66.00, suggesting a potential upside of 42.52%. Given Truist Financial’s higher probable upside, analysts plainly believe Truist Financial is more favorable than United Security Bancshares.

Summary

Truist Financial beats United Security Bancshares on 12 of the 16 factors compared between the two stocks.

About Truist Financial (Get Rating)

Truist Financial Corporation, a holding company, provides banking and trust services in the Southeastern and Mid-Atlantic United States. The company operates through three segments: Consumer Banking and Wealth, Corporate and Commercial Banking, and Insurance Holdings. Its deposit products include noninterest-bearing checking, interest-bearing checking, savings, and money market deposit accounts, as well as certificates of deposit and individual retirement accounts. The company also provides funding; asset management; automobile lending; bankcard lending; consumer finance; home equity and mortgage lending; insurance, such as property and casualty, life, health, employee benefits, workers compensation and professional liability, surety coverage, title, and other insurance products; investment brokerage; mobile/online banking; and payment, lease financing, small business lending, and wealth management/private banking services. In addition, it offers association, capital market, institutional trust, insurance premium and commercial finance, international banking, leasing, merchant, commercial deposit and treasury, government finance, commercial middle market lending, small business and student lending, floor plan and commercial mortgage lending, mortgage warehouse lending, private equity investment, real estate lending, and supply chain financing services. Further, the company provides corporate and investment banking, retail and wholesale brokerage, securities underwriting, and investment advisory services. As of December 31, 2021, the company operated through 2,517 banking offices. The company was formerly known as BB&T Corporation and changed its name to Truist Financial Corporation in December 2019. Truist Financial Corporation was founded in 1872 and is headquartered in Charlotte, North Carolina.

About United Security Bancshares (Get Rating)

United Security Bancshares operates as the bank holding company for United Security Bank, a state-chartered bank that provides a range of commercial banking services to the business and professional community, and individuals in California. The company accepts various deposit products, including personal and business checking accounts, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificates of deposit. It also provides real estate mortgage, commercial and industrial, real estate construction, and consumer loans, as well as agricultural, installment, and student loans. In addition, the company offers online and mobile banking, safe deposit boxes, wire transfers, payroll direct deposit, cashier's check, cash management, traveler's check, money order, and foreign draft services, as well as interactive teller machines and ATM services. As of January 26, 2022, it operated 12 full-service branch offices in Fresno, Bakersfield, Campbell, Caruthers, Coalinga, Firebaugh, Mendota, Oakhurst, San Joaquin, and Taft. The company was founded in 1987 and is headquartered in Fresno, California.

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