A Look at United Bankshares’s (UBSI) Valuation After New Buyback and Dividend Increase

United Bankshares (UBSI) just announced a new share repurchase program, authorizing the buyback of up to 5 million shares, or 4% of its total outstanding shares. In addition, the company declared a higher dividend for the upcoming quarter, which may attract attention from investors.

See our latest analysis for United Bankshares.

United Bankshares’ new buyback and dividend increase come as the stock’s momentum has started to pick up, with a 4.1% share price return over the past month. However, the total shareholder return for the past year remains down by 8.3%, showing that many investors are still waiting for a sustained turnaround or renewed optimism in the banking sector.

If United Bankshares’ recent moves have you eyeing broader trends, now is the perfect time to widen your search and discover fast growing stocks with high insider ownership

With shares still trading below analyst targets and a notable intrinsic discount, are investors getting a bargain on United Bankshares, or has the market already priced in its next chapter of growth?

Price-to-Earnings of 12.2x: Is it justified?

At a price-to-earnings (P/E) ratio of 12.2x, United Bankshares trades below its peer average of 14.7x and its last close price of $37.24. This suggests a relative value in comparison to other banks.

The price-to-earnings ratio measures what investors are willing to pay today for each dollar of current earnings. For a bank like United Bankshares, this metric offers insight into how the market values its profitability compared to the competition.

While the current P/E is lower than the peer average, it is slightly higher than both the industry average of 11.4x and its estimated fair P/E ratio of 11.2x. This suggests that although the stock trades at a discount to peers, it may be priced at a premium relative to industry expectations and its fair value level. This could be where the market ultimately settles.

Explore the SWS fair ratio for United Bankshares

Result: Price-to-Earnings of 12.2x (ABOUT RIGHT)

However, softer year-over-year growth in both revenue and net income may limit further upside if industry headwinds persist.

Find out about the key risks to this United Bankshares narrative.

Another View: Discounted Cash Flow Offers a Different Perspective

While the price-to-earnings ratio suggests United Bankshares is fairly valued compared to peers, our DCF model provides a sharper contrast. According to this approach, the stock trades well below its estimated fair value, which may indicate significant potential undervaluation in the market. The question remains whether this discrepancy points to a hidden opportunity or reflects lingering risks that have not yet been priced in.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out United Bankshares for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 914 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own United Bankshares Narrative

If you see things differently or want to dig into the numbers yourself, it only takes a few minutes to craft your own view. Do it your way

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding United Bankshares.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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