United Bankshares, Inc. (West Virginia) – Value Analysis (NASDAQ:UBSI) : December 21, 2017

Capitalcube gives United Bankshares, Inc. (West Virginia) a score of 54.

Our analysis is based on comparing United Bankshares, Inc. (West Virginia) with the following peers – SunTrust Banks, Inc., First Citizens BancShares, Inc. Class A, BB&T Corporation, Union Bankshares Corporation, M&T Bank Corporation, Huntington Bancshares Incorporated, First Community Bancshares, Inc., Fifth Third Bancorp, Bank of the Ozarks and F.N.B. Corporation (STI-US, FCNCA-US, BBT-US, UBSH-US, MTB-US, HBAN-US, FCBC-US, FITB-US, OZRK-US and FNB-US).

Fundamental Overview

United Bankshares, Inc. (West Virginia) has a fundamental score of 54 and has a relative valuation of OVERVALUED.

Fundamental Score

Company Overview

  • It’s current Price/Book of 1.15 is about median in its peer group.
  • The market expects UBSI-US to grow at about the same rate as the peers and to maintain the median returns it currently generates.
  • UBSI-US employs relatively high amounts of capital while generating median profit margins.
  • Changes in annual earnings are in line with its chosen peers but lags in terms of revenue, implying the company is cost conscious and selective about spending for growth.
  • UBSI-US‘s return on equity currently and over the past five years is around the peer median and suggest that it does not have any particular operational advantages versus peers.
  • While UBSI-US‘s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.
  • The company is likely overinvesting in a business with only median returns.

Drivers of Margin

  • UBSI-US‘s pre-tax margin suggests relatively low operating costs.
  • The company’s net interest income (net interest income/total revenues) of 81.32% is around peer median suggesting that UBSI-US‘s lending operations does not benefit from any differentiating pricing advantage. However, UBSI-US‘s pre-tax margin is more than the peer median (41.92% compared to 32.93%) suggesting relatively low operating costs.
  • The company’s comparatively low proportion of fee based income (i.e. non interest income/total revenues) of 18.68% versus peer median of 30.75% — suggests that UBSI-US‘s operating margins are likely to be more volatile. In addition, UBSI-US‘s proportion of overhead costs (i.e. non interest expense/total revenues) of 53.71x is around peer median — suggesting no cost advantage on fee-based overhead operations.
Drivers of Margins

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Differentiated; High Cost, Commodity; High Cost, Commodity; Low Cost

Company Profile

United Bankshares, Inc. engages in the provision of commercial and retail banking services and products. It operates through the bank and nonbank subsidiaries which engages in community banking services such as asset management, real property title insurance, investment banking, financial planning, and brokerage services. The company was founded in 1839 and is headquartered in Charleston, WV.