Five Star Bancorp (NASDAQ:FSBC – Get Rating) and United Community Banks (NASDAQ:UCBI – Get Rating) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.
Analyst Recommendations
This is a summary of current recommendations for Five Star Bancorp and United Community Banks, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Five Star Bancorp | 0 | 0 | 1 | 0 | 3.00 |
| United Community Banks | 0 | 2 | 3 | 0 | 2.60 |
Five Star Bancorp presently has a consensus price target of $32.00, indicating a potential upside of 63.43%. United Community Banks has a consensus price target of $31.80, indicating a potential upside of 47.50%. Given Five Star Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe Five Star Bancorp is more favorable than United Community Banks.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| Five Star Bancorp | 33.94% | 19.90% | 1.58% |
| United Community Banks | 27.77% | 11.48% | 1.25% |
Institutional & Insider Ownership
45.5% of Five Star Bancorp shares are held by institutional investors. Comparatively, 85.4% of United Community Banks shares are held by institutional investors. 27.7% of Five Star Bancorp shares are held by insiders. Comparatively, 0.5% of United Community Banks shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Five Star Bancorp and United Community Banks’ top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Five Star Bancorp | $125.07 million | 2.70 | $44.80 million | $2.80 | 6.99 |
| United Community Banks | $906.19 million | 2.74 | $277.47 million | $2.61 | 8.26 |
United Community Banks has higher revenue and earnings than Five Star Bancorp. Five Star 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.
Dividends
Five Star Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 3.1%. United Community Banks pays an annual dividend of $0.92 per share and has a dividend yield of 4.3%. Five Star Bancorp pays out 21.4% of its earnings in the form of a dividend. United Community Banks pays out 35.2% 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. United Community Banks has increased 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.
Risk & Volatility
Five Star Bancorp has a beta of -0.11, suggesting that its stock price is 111% less volatile than the S&P 500. Comparatively, United Community Banks has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.
Summary
United Community Banks beats Five Star Bancorp on 9 of the 17 factors compared between the two stocks.
About Five Star Bancorp
Five Star Bancorp operates as the bank holding company for Five Star Bank that provides a range of banking products and services to small and medium-sized businesses, professionals, and individuals. The company accepts various deposits, such as money market, noninterest-bearing and interest checking accounts, savings accounts, and time deposits. Its loan products include commercial and residential real estate loans; commercial loans; commercial land loans; farmland loans; commercial and residential construction loans; and consumer and other loans. The company also offers debit cards; and remote deposit capture, online and mobile banking, and direct deposit services. It operates through seven branch offices and two loan production offices in Northern California. Five Star Bancorp was founded in 1999 and is headquartered in Rancho Cordova, California.
About United Community Banks
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.
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