Critical Contrast: First Bancorp (NASDAQ:FBNC) vs. United Community Banks (NASDAQ:UCBI)

First Bancorp (NASDAQ:FBNC – Get Rating) and United Community Banks (NASDAQ:UCBI – Get Rating) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, risk, dividends, profitability, earnings, valuation and institutional ownership.

Analyst Recommendations

This is a summary of recent ratings for First Bancorp and United Community Banks, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Bancorp	0	1	2	0	2.67
United Community Banks	0	3	1	0	2.25

First Bancorp currently has a consensus target price of $44.00, suggesting a potential upside of 6.43%. United Community Banks has a consensus target price of $35.00, suggesting a potential upside of 6.38%. Given First Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe First Bancorp is more favorable than United Community Banks.

Profitability

This table compares First Bancorp and United Community Banks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Bancorp	35.93%	14.01%	1.39%
United Community Banks	29.18%	11.37%	1.22%

Dividends

First Bancorp pays an annual dividend of $0.88 per share and has a dividend yield of 2.1%. United Community Banks pays an annual dividend of $0.92 per share and has a dividend yield of 2.8%. First Bancorp pays out 21.4% of its earnings in the form of a dividend. United Community Banks pays out 36.5% 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. First Bancorp has raised its dividend for 2 consecutive years and United Community Banks has raised its dividend for 9 consecutive years. United Community Banks is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares First Bancorp and United Community Banks’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Bancorp	$408.94 million	4.13	$146.94 million	$4.12	10.03
United Community Banks	$868.13 million	4.02	$277.47 million	$2.52	13.06

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

Insider and Institutional Ownership

69.4% of First Bancorp shares are held by institutional investors. Comparatively, 85.4% of United Community Banks shares are held by institutional investors. 1.9% of First Bancorp shares are held by company insiders. Comparatively, 0.5% of United Community Banks shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

First Bancorp has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500. Comparatively, United Community Banks has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500.

Summary

First Bancorp beats United Community Banks on 11 of the 17 factors compared between the two stocks.

About First Bancorp

(Get Rating)

First Bancorp (North Carolina) operates as a bank holding company, which engages in banking activities, with the acceptance of deposits and the making of loans. It provides a range of deposit products such as checking, savings, NOW, and money market accounts, as well as time deposits, including various types of certificates of deposits and individual retirement accounts. The company’s offerings include credit cards, debit cards, letters of credit, safe deposit box rentals, bank money orders and electronic funds transfer services, including wire transfers. It also offers loans for a range of consumer and commercial purposes, including loans for business, agriculture, real estate, personal uses, home improvement and automobiles. The company was founded on December 8, 1983 and is headquartered in Southern Pines, NC.

About United Community Banks

(Get Rating)

United Community Banks, Inc. is a bank holding company, which engages in the provision of consumer and business banking services. The firm caters to individuals and small and medium-sized businesses. It offers checking, savings, mortgages, borrowing, digital baking, credit cards, and investing services. The company was founded in 1950 and is headquartered in Blairsville, GA.