UMB Financial (NYSE: WFC) and Wells Fargo & Co (NYSE:WFC) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, valuation, dividends and earnings.

Analyst Ratings

This is a breakdown of recent ratings for UMB Financial and Wells Fargo & Co, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
UMB Financial 0 3 0 0 2.00
Wells Fargo & Co 2 8 13 0 2.48

UMB Financial presently has a consensus price target of $79.67, indicating a potential upside of 5.25%. Wells Fargo & Co has a consensus price target of $63.84, indicating a potential upside of 11.11%. Given Wells Fargo & Co’s stronger consensus rating and higher probable upside, analysts plainly believe Wells Fargo & Co is more favorable than UMB Financial.

Earnings and Valuation

This table compares UMB Financial and Wells Fargo & Co’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
UMB Financial $1.04 billion 3.64 $247.10 million $3.75 20.18
Wells Fargo & Co $97.74 billion 2.87 $22.18 billion $4.11 13.98

Wells Fargo & Co has higher revenue and earnings than UMB Financial. Wells Fargo & Co is trading at a lower price-to-earnings ratio than UMB Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares UMB Financial and Wells Fargo & Co’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
UMB Financial 25.18% 9.94% 1.03%
Wells Fargo & Co 22.03% 12.38% 1.17%

Volatility & Risk

UMB Financial has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500. Comparatively, Wells Fargo & Co has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500.

Dividends

UMB Financial pays an annual dividend of $1.16 per share and has a dividend yield of 1.5%. Wells Fargo & Co pays an annual dividend of $1.72 per share and has a dividend yield of 3.0%. UMB Financial pays out 30.9% of its earnings in the form of a dividend. Wells Fargo & Co pays out 41.8% 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. UMB Financial has increased its dividend for 13 consecutive years and Wells Fargo & Co has increased its dividend for 6 consecutive years.

Institutional & Insider Ownership

89.4% of UMB Financial shares are owned by institutional investors. Comparatively, 75.8% of Wells Fargo & Co shares are owned by institutional investors. 10.3% of UMB Financial shares are owned by insiders. Comparatively, 0.1% of Wells Fargo & Co shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Wells Fargo & Co beats UMB Financial on 10 of the 17 factors compared between the two stocks.

About UMB Financial

UMB Financial Corporation, a bank holding company, provides various banking and other financial services. It operates through two segments, Bank and Asset Servicing. The Bank segment offers a range of banking services to commercial, retail, government, and correspondent bank customers through its branches, call center, Internet banking, and ATM network. Its services comprise traditional commercial and consumer banking, treasury management, leasing, foreign exchange, merchant bankcard, wealth management, brokerage, insurance, capital markets, investment banking, corporate trust, and correspondent banking. The Asset Servicing segment provides services to the asset management industry, including a range of investment products, such as mutual funds, alternative investments, and managed accounts. Its services include fund administration, fund accounting, investor services, transfer agency, distribution, marketing, custody, alternative investment services, and collective and multiple-series trust services. The company operates through a network of branches and offices in the states of Missouri, Kansas, Colorado, Illinois, Oklahoma, Texas, Arizona, Nebraska, Pennsylvania, South Dakota, Indiana, Utah, Minnesota, California, and Wisconsin. The company was founded in 1913 and is headquartered in Kansas City, Missouri.

About Wells Fargo & Co

Wells Fargo & Company, a diversified financial services company, provides retail, commercial, and corporate banking services to individuals, businesses, and institutions. The company's Community Banking segment offers checking and savings accounts; credit and debit cards; and automobile, student, mortgage, home equity, and small business loans. Its Wholesale Banking segment offers commercial loans and lines of credit, letters of credit, asset-based lending, equipment leasing, international trade facilities, trade financing, collection, foreign exchange, treasury management, merchant payment processing, institutional fixed-income sales, commodity and equity risk management, corporate trust fiduciary and agency, and investment banking services, as well as online/electronic products. This segment also provides construction, and land acquisition and development loans; secured and unsecured lines of credit; interim financing arrangements; rehabilitation loans; affordable housing loans and letters of credit; loans for securitization; and real estate and mortgage brokerage services. The company's Wealth and Investment Management segment offers financial planning, private banking, credit, and investment management and fiduciary services, as well as retirement and trust services. It serves clients through approximately 8,300 locations and 13,000 ATMs; online and mobile banking; and offices in 42 countries. Wells Fargo & Company was founded in 1852 and is headquartered in San Francisco, California.

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