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Here's Why United Bankshares (UBSI) Stock Is Worth Buying Now
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United Bankshares, Inc. (UBSI - Free Report) is well-poised for growth, supported by decent loan demand and efforts to improve fee income. With a solid balance sheet and earnings strength, its capital distributions seem sustainable.
Analysts also seem optimistic regarding the company’s earnings growth potential. Over the past 60 days, the Zacks Consensus Estimate for UBSI’s earnings has been revised 2.3% and 2.3% upward for 2024 and 2025, respectively. The stock currently carries a Zacks Rank #2 (Buy).
UBSI’s shares have rallied 21.4% in the past six months compared with the industry’s 13.4% growth.
Image Source: Zacks Investment Research
Let’s dive deeper into what makes the UBSI stock worth betting on.
Earnings Strength: UBSI’s earnings per share witnessed 4.2% growth over the last three to five years. While its 2024 earnings are expected to decline 5% due to a challenging operating backdrop, the metric is expected to grow 3.4% in 2025.
Revenue Growth Potential: United Bankshares’ organic growth trajectory remains impressive. Its total revenues witnessed a compound annual growth rate (CAGR) of 13.9% over the last four years (2019-2023). The increase was primarily attributed to strong loan balances (witnessing an 11.7% CAGR over the same time frame) and efforts to bolster fee income.
Decent loan demand and efforts to improve non-interest income are likely to keep aiding top-line growth. The Zacks Consensus Estimate for its 2024 revenues reflects a decline of 1%, along with subsequent growth of 3.9% in 2025.
Strong Balance Sheet: UBSI’s capital ratios remain strong and well above regulatory guidelines. Its CET1 capital ratio was 13.1% as of Dec 31, 2023, compared with the regulatory guideline of 6.5%. It indicates a strengthened capital base to protect in the event of an economic downturn.
As of Dec 31, 2023, the company’s cash and cash equivalents were $1.6 billion, loans and leases were $21.4 billion, deposits were $13.9 billion, and other long-term borrowings were $278.6 million, signifying strong liquidity to meet the debt obligations in the near term.
Impressive Capital Distribution: United Bankshares remains engaged in capital distribution activities. The company has been paying quarterly cash dividends constantly. It has increased its quarterly dividend thrice in the last five years. The last hike, which raised the quarterly dividend to 37 cents per share, was in November 2023. It has a dividend payout ratio of 53% and five-year annualized dividend growth of 1.45%.
The company has an active repurchase program in place. Under the plan announced in 2022, almost 4.37 million shares were available as of Dec 31, 2023. UBSI did not repurchase any shares in 2023.
Supported by a strong balance sheet position and earnings strength, the company’s capital distribution activities are expected to remain sustainable, which, in turn, will help enhance shareholders’ value.
The Zacks Consensus Estimate for BSVN’s 2024 earnings has been revised 5.8% north over the past 60 days. Over the past six months, shares of Bank7 Corp have risen 16.5%.
The Zacks Consensus Estimate for FCCO’s current-year earnings has been revised 9% upward over the past 60 days. First Community Corp’s shares have lost 2.6% over the past six months.
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Here's Why United Bankshares (UBSI) Stock Is Worth Buying Now
United Bankshares, Inc. (UBSI - Free Report) is well-poised for growth, supported by decent loan demand and efforts to improve fee income. With a solid balance sheet and earnings strength, its capital distributions seem sustainable.
Analysts also seem optimistic regarding the company’s earnings growth potential. Over the past 60 days, the Zacks Consensus Estimate for UBSI’s earnings has been revised 2.3% and 2.3% upward for 2024 and 2025, respectively. The stock currently carries a Zacks Rank #2 (Buy).
UBSI’s shares have rallied 21.4% in the past six months compared with the industry’s 13.4% growth.
Image Source: Zacks Investment Research
Let’s dive deeper into what makes the UBSI stock worth betting on.
Earnings Strength: UBSI’s earnings per share witnessed 4.2% growth over the last three to five years. While its 2024 earnings are expected to decline 5% due to a challenging operating backdrop, the metric is expected to grow 3.4% in 2025.
Revenue Growth Potential: United Bankshares’ organic growth trajectory remains impressive. Its total revenues witnessed a compound annual growth rate (CAGR) of 13.9% over the last four years (2019-2023). The increase was primarily attributed to strong loan balances (witnessing an 11.7% CAGR over the same time frame) and efforts to bolster fee income.
Decent loan demand and efforts to improve non-interest income are likely to keep aiding top-line growth. The Zacks Consensus Estimate for its 2024 revenues reflects a decline of 1%, along with subsequent growth of 3.9% in 2025.
Strong Balance Sheet: UBSI’s capital ratios remain strong and well above regulatory guidelines. Its CET1 capital ratio was 13.1% as of Dec 31, 2023, compared with the regulatory guideline of 6.5%. It indicates a strengthened capital base to protect in the event of an economic downturn.
As of Dec 31, 2023, the company’s cash and cash equivalents were $1.6 billion, loans and leases were $21.4 billion, deposits were $13.9 billion, and other long-term borrowings were $278.6 million, signifying strong liquidity to meet the debt obligations in the near term.
Impressive Capital Distribution: United Bankshares remains engaged in capital distribution activities. The company has been paying quarterly cash dividends constantly. It has increased its quarterly dividend thrice in the last five years. The last hike, which raised the quarterly dividend to 37 cents per share, was in November 2023. It has a dividend payout ratio of 53% and five-year annualized dividend growth of 1.45%.
The company has an active repurchase program in place. Under the plan announced in 2022, almost 4.37 million shares were available as of Dec 31, 2023. UBSI did not repurchase any shares in 2023.
Supported by a strong balance sheet position and earnings strength, the company’s capital distribution activities are expected to remain sustainable, which, in turn, will help enhance shareholders’ value.
Other Stocks Worth Considering
A couple of other top-ranked stocks from the banking space are Bank7 Corp. (BSVN - Free Report) and First Community, Corp. (FCCO - Free Report) . At present, BSVN and FCCO sport a Zacks Rank #1 (Strong Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BSVN’s 2024 earnings has been revised 5.8% north over the past 60 days. Over the past six months, shares of Bank7 Corp have risen 16.5%.
The Zacks Consensus Estimate for FCCO’s current-year earnings has been revised 9% upward over the past 60 days. First Community Corp’s shares have lost 2.6% over the past six months.