Financial Analysis: Banco Bradesco (NYSE:BBD) versus United Community Banks (NASDAQ:UCB)

Banco Bradesco (NYSE:BBD) and United Community Banks (NASDAQ:UCB) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, profitability, analyst recommendations, valuation and risk.

Dividends

Banco Bradesco pays an annual dividend of $0.03 per share and has a dividend yield of 1.4%. United Community Banks pays an annual dividend of $0.96 per share and has a dividend yield of 2.9%. Banco Bradesco pays out 11.5% of its earnings in the form of a dividend. United Community Banks pays out 47.1% 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 Banco Bradesco and United Community Banks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banco Bradesco	7.43%	10.17%	0.86%
United Community Banks	16.48%	8.64%	1.04%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Banco Bradesco and United Community Banks, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banco Bradesco	0	2	2	0	2.50
United Community Banks	0	2	1	0	2.33

Banco Bradesco presently has a consensus price target of $2.55, indicating a potential upside of 20.57%. United Community Banks has a consensus price target of $33.33, indicating a potential upside of 0.58%. Given Banco Bradesco’s stronger consensus rating and higher probable upside, research analysts clearly believe Banco Bradesco is more favorable than United Community Banks.

Volatility & Risk

Banco Bradesco has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, United Community Banks has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500.

Institutional & Insider Ownership

82.3% of United Community Banks shares are owned by institutional investors. 0.3% of Banco Bradesco shares are owned by insiders. Comparatively, 0.5% of United Community Banks shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Banco Bradesco and United Community Banks”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banco Bradesco	$39.41 billion	0.57	$2.85 billion	$0.26	8.13
United Community Banks	$1.50 billion	2.63	$252.40 million	$2.04	16.25

Banco Bradesco has higher revenue and earnings than United Community Banks. Banco Bradesco 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.

About Banco Bradesco

Banco Bradesco S.A., together with its subsidiaries, provides various banking products and services to individuals, corporates, and businesses in Brazil and internationally. The company operates through two segments, Banking and Insurance. It provides current, savings, click, and salary accounts; real estate credit, vehicle financing, payroll loans, mortgage loans, microcredit, leasing, and personal and installment credit; overdraft and agribusiness loans; debit and business cards; financial and security services; consortium products; car, personal accident, dental, travel, and life insurance; investment products; pension products; foreign currency exchange services; capitalization bonds; and internet banking services. Banco Bradesco S.A. was founded in 1943 and is headquartered in Osasco, Brazil.

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. It accepts various deposit products, including checking, savings, money market, and other deposit accounts. The company 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, it originates loans partially guaranteed by the SBA and USDA loan programs. Further, the company 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, it offers reinsurance on a property insurance contract; insurance agency services; treasury management; credit cards; payment and commerce solution, equipment finance, investment advisory, and other related financial services; brokerage services; and payment processing, merchant, wire transfer, private banking, and other related financial services. The company was founded in 1950 and is headquartered in Blairsville, Georgia.