Review of Alerus Financial (NASDAQ:ALRS) and UMB Financial (NASDAQ:UMBF)


Alerus Financial (NASDAQ:ALRS – Get Rating) and UMB Financial (NASDAQ:UMBF – Get Rating) are both finance companies, but which is the best investment? We will compare the two companies based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Analyst Notes

This is a summary of recent ratings and recommendations for Alerus Financial and UMB Financial, as reported by MarketBeat.

Sales Ratings Hold odds Buy reviews Strong buy odds Rating
Alerus Financial 0 0 0 0 N / A
UMB Financial 0 1 2 0 2.67

UMB Financial has a consensus price target of $115.00, suggesting a potential upside of 22.84%. Given the higher possible upside of UMB Financial, analysts clearly believe that UMB Financial is more favorable than Alerus Financial.

Volatility and risk

Alerus Financial has a beta of 0.73, suggesting its stock price is 27% less volatile than the S&P 500. In comparison, UMB Financial has a beta of 0.94, suggesting its stock price is 6% less volatile than the S&P 500.

Benefits and evaluation

This table compares the revenue, earnings per share and valuation of Alerus Financial and UMB Financial.

Gross revenue Price/sales ratio Net revenue Earnings per share Price/earnings ratio
Alerus Financial $240.04 million 1.89 $52.68 million $2.98 8.73
UMB Financial $1.34 billion 3.39 $353.02 million $7.25 12.91

UMB Financial has higher revenue and profit than Alerus Financial. Alerus Financial trades 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 the net margins, return on equity and return on assets of Alerus Financial and UMB Financial.

Net margins Return on equity return on assets
Alerus Financial 21.95% 15.20% 1.64%
UMB Financial 26.57% 11.52% 0.94%

Insider and Institutional Ownership

36.1% of Alerus Financial shares are held by institutional investors. Comparatively, 86.7% of UMB Financial’s shares are held by institutional investors. 6.9% of Alerus Financial shares are held by insiders. Comparatively, 9.8% of UMB Financial’s shares are held by insiders. Strong institutional ownership indicates that large money managers, endowments, and hedge funds believe a company is poised for long-term growth.

Dividends

Alerus Financial pays an annual dividend of $0.64 per share and has a dividend yield of 2.5%. UMB Financial pays an annual dividend of $1.48 per share and has a dividend yield of 1.6%. Alerus Financial pays 21.5% of its profits as a dividend. UMB Financial distributes 20.4% of its profits as a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. UMB Financial has increased its dividend for 18 consecutive years.

Summary

UMB Financial beats Alerus Financial on 13 out of 16 factors compared between the two stocks.

About Alerus Financial (Get an assessment)

Alerus Financial Corporation, through its subsidiary, Alerus Financial, National Association, provides various financial services to businesses and consumers. The Company operates through four segments: Banking, Pension and Benefits, Wealth Management and Mortgages. It offers various deposit products, including demand deposits, interest-bearing transaction accounts, money market accounts, term and savings deposits, checking accounts and certificates of deposit; and cash management products, including electronic receivables management, remote deposit capture, vault services, merchant services and other cash management services. The Company also offers commercial loans, business term loans, lines of credit and commercial real estate loans, as well as loans for construction and land development; consumer credit products, including residential first mortgages; installment loans and lines of credit; and second mortgages. In addition, it offers pension plan administration and investment advisory services, employee stock ownership plan, trust services, payroll, health savings accounts and other employee benefits services. , as well as individual retirement accounts; and financial planning, investment management, personal and business trust, estate administration and custodial services. In addition, the Company provides debit and credit cards, online banking, mobile banking/wallet services, payments, private banking, payroll accounts, flexible spending accounts, mobile banking services. administration and government health insurance program. It offers banking services through fourteen offices in North Dakota, Minnesota and Arizona; and pension and benefit plans in 50 states through offices in Michigan, Minnesota and Colorado. The company was formerly known as First National Bank North Dakota and changed its name to Alerus Financial Corporation in 2000. Alerus Financial Corporation was founded in 1879 and is headquartered in Grand Forks, North Dakota.

About UMB Financial (Get an assessment)

UMB Financial Corporation operates as a bank holding company for UMB bank which provides various banking and other financial services. The Commercial Banking segment provides commercial loans and credit cards; commercial real estate financing; letter of credit; loan syndication and advisory service; various business solutions, including asset-based lending, accounts receivable financing, mezzanine debt and minority equity investments; and cash management service, such as deposit service, account reconciliation, cash management tool, accounts payable and receivable solution, electronic funds transfer and automated payment, controlled disbursement, vault service and input service remote filing. The Institutional Banking segment offers asset management and healthcare services provided to institutional clients; and fund administration and accounting, investor service and transfer agency, marketing and distribution, custody, alternative investment service, fixed income sales, trading and underwriting, and corporate trust and escrow service , as well as institutional daycare. This segment also provides healthcare payment solution including custodial service for health savings accounts and private brands, multi-purpose debit cards to insurance companies, third-party administrators, software companies, employers and financial institutions. The Retail Banking segment offers deposit accounts, retail credit cards, private banking, installment loans, home equity lines of credit, residential mortgages and small business loans, as well as internet banking, an ATM network, private banking, brokerage and insurance, and advisory and trust services. It operates through a network of branches and offices in the states of Missouri, Kansas, Colorado, Illinois, Oklahoma, Texas, Arizona, Nebraska, Iowa, Pennsylvania, South Dakota, Indiana, Utah, Minnesota, California and Wisconsin. The company was founded in 1913 and is based in Kansas City, Missouri.



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Penny D. Jackson