United Community Banks Inc (UCB) stock analysis

P/E above its 5-year median

United Community Banks's P/E of 31.7 is above its own 5-year median of 13.2.

P/E above the industry

United Community Banks's P/E of 31.7 is above the Commercial Banks median of 12.1.

P/S above the industry

United Community Banks's price-to-sales of 5.49 is above the Commercial Banks median of 3.60.

P/B above the industry

United Community Banks's price-to-book of 1.29 is above the Commercial Banks median of 1.29.

Trading above fair value

The share price of $37.44 is above our fair value estimate of $24.74.

Margin of safety under 20%

The price is 51.4% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 8.8% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 1.3% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -53.8% over the last twelve months, against a 5-year average of 14.9% a year.

Growing slower than the industry

Revenue grew -20.6% over the last twelve months; the Commercial Banks median is 11.3%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

Banks and insurers do not report gross profit.

Return on equity under 15%

Return on equity was 4.1% over the last twelve months and averaged 9.4% over five years; we look for 15% on both.

Return on assets under 1%

Return on assets was 0.5%; for a bank or insurer, 1% or more is considered good.

Return on equity below the industry

United Community Banks's return on equity of 4.1% is below the Commercial Banks median of 11.5%.

Earnings grew over 5 years

Net income grew 14.9% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 17.8% over the last twelve months, against a 5-year average of 29.6%.

Net margin below the industry

United Community Banks's net margin of 17.8% is below the Commercial Banks median of 30.3%.

Well capitalized

Equity is 12.1% of total assets; 8% or more is a comfortable cushion.

Loans funded by deposits

Loans equal 75.6% of deposits, so lending is funded by customer deposits.

Thin loan-loss reserve

The allowance for credit losses is 1.0% of loans; we look for at least 1%.

High cost base

Non-interest expense takes 76.8% of revenue; under 60% is efficient for a bank.

Deposits growing

Deposits grew 3.6% over the past year.

Modest borrowings

Borrowings other than deposits are 0.0% of equity.

Pays a dividend

United Community Banks paid dividends worth 2.7% of the share price over the last twelve months.

Yield below Treasuries

The 2.7% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; United Community Banks yields 2.7%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 83.3% of net income.

Covered by free cash flow

Dividends take 30.3% of free cash flow.