United Community Banks (NYSE:UCB) versus Chesapeake Financial Shares (OTCMKTS:CPKF) Critical Survey

Chesapeake Financial Shares (OTCMKTS:CPKF) and United Community Banks (NYSE:UCB) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Dividends

Chesapeake Financial Shares pays an annual dividend of $0.72 per share and has a dividend yield of 1.9%. United Community Banks pays an annual dividend of $1.00 per share and has a dividend yield of 2.7%. Chesapeake Financial Shares pays out 17.1% of its earnings in the form of a dividend. United Community Banks pays out 36.8% 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.

Profitability

This table compares Chesapeake Financial Shares and United Community Banks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chesapeake Financial Shares	17.24%	15.51%	1.19%
United Community Banks	22.05%	9.65%	1.24%

Risk and Volatility

Chesapeake Financial Shares has a beta of 0.24, meaning that its share price is 76% less volatile than the S&P 500. Comparatively, United Community Banks has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Chesapeake Financial Shares and United Community Banks, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chesapeake Financial Shares	0	0	0	0	0.00
United Community Banks	0	3	4	1	2.75

United Community Banks has a consensus price target of $38.40, indicating a potential upside of 5.47%. Given United Community Banks’ stronger consensus rating and higher probable upside, analysts plainly believe United Community Banks is more favorable than Chesapeake Financial Shares.

Insider and Institutional Ownership

3.7% of Chesapeake Financial Shares shares are held by institutional investors. Comparatively, 82.3% of United Community Banks shares are held by institutional investors. 39.5% of Chesapeake Financial Shares shares are held by insiders. Comparatively, 0.5% of United Community Banks shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Chesapeake Financial Shares and United Community Banks”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chesapeake Financial Shares	$102.27 million	1.73	$10.00 million	$4.22	8.95
United Community Banks	$1.54 billion	2.84	$328.10 million	$2.72	13.39

United Community Banks has higher revenue and earnings than Chesapeake Financial Shares. Chesapeake Financial Shares 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.

Summary

United Community Banks beats Chesapeake Financial Shares on 13 of the 17 factors compared between the two stocks.

About Chesapeake Financial Shares

Chesapeake Financial Shares, Inc. operates as the bank holding company for Chesapeake Bank that provides various banking products and services for individuals and businesses in the United States. The company accepts interest and noninterest checking, savings, and money market accounts; and variable-rate and fixed-term money market accounts, as well as certificates of deposit. It also offers mortgage, and single-family residential and residential construction loans; commercial loans, which include owner-occupied commercial development, retail, builders/contractors, medical, service and professional, hospitality, nonprofits, marine industry, and agricultural and seafood loans; and consumer and other loans. In addition, the company provides merchant processing, accounts receivable financing, wealth management and trust, and mortgage banking services, as well as cash management services. The company was founded in 1900 and is based in Kilmarnock, Virginia.

About United Community Banks

United Community Banks, Inc. operates as the financial holding company for United Community Bank that provides financial products and services to commercial, retail, government, education, energy, health care, and real estate sectors. The company accepts various deposit products, including checking, savings, money market, and other deposit accounts. It also offers lending services, including real estate, consumer, and commercial loans, to individuals, small businesses, mid-sized commercial businesses, and non-profit organizations, as well as secured and unsecured, and mortgage loans. In addition, the company originate loans partially guaranteed by the SBA and USDA loan programs. Further, it provides wealth management services comprising financial planning, customized portfolio management, and investment advice; trust services to manage fiduciary assets; non-deposit investment products; and insurance products, including life insurance, long-term care insurance, and tax-deferred annuities, as well as invests in residential and commercial mortgage-backed securities, asset-backed securities, the U.S. treasury, the U.S. agency, and municipal obligations. Additionally, the company offers reinsurance on a property insurance contract; insurance agency services; brokerage services; and payment processing, merchant, wire transfer, private banking, and other related financial services. It operates through a network of 171 branches in Florida, Georgia, North Carolina, South Carolina, and Tennessee. United Community Banks, Inc. was founded in 1950 and is headquartered in Blairsville, Georgia.