United Security Bancshares (NASDAQ:UBFO – Get Free Report) and Burke & Herbert Financial Services (NASDAQ:BHRB – Get Free Report) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, risk, analyst recommendations, institutional ownership, valuation and earnings.
Institutional and Insider Ownership
30.9% of United Security Bancshares shares are held by institutional investors. 22.1% of United Security Bancshares shares are held by company insiders. Comparatively, 12.0% of Burke & Herbert Financial Services shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Analyst Ratings
This is a breakdown of current recommendations and price targets for United Security Bancshares and Burke & Herbert Financial Services, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| United Security Bancshares | 0 | 0 | 1 | 0 | 3.00 |
| Burke & Herbert Financial Services | 0 | 3 | 2 | 1 | 2.67 |
Risk and Volatility
United Security Bancshares has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500. Comparatively, Burke & Herbert Financial Services has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.
Valuation & Earnings
This table compares United Security Bancshares and Burke & Herbert Financial Services”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| United Security Bancshares | $53.51 million | 3.39 | $12.29 million | $0.71 | 14.80 |
| Burke & Herbert Financial Services | $358.66 million | 4.03 | $117.31 million | $6.24 | 11.48 |
Burke & Herbert Financial Services has higher revenue and earnings than United Security Bancshares. Burke & Herbert Financial Services is trading at a lower price-to-earnings ratio than United Security Bancshares, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares United Security Bancshares and Burke & Herbert Financial Services’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| United Security Bancshares | 18.65% | 9.03% | 1.01% |
| Burke & Herbert Financial Services | 18.86% | 13.66% | 1.46% |
Dividends
United Security Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 4.6%. Burke & Herbert Financial Services pays an annual dividend of $2.20 per share and has a dividend yield of 3.1%. United Security Bancshares pays out 67.6% of its earnings in the form of a dividend. Burke & Herbert Financial Services pays out 35.3% 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. United Security Bancshares has raised its dividend for 2 consecutive years and Burke & Herbert Financial Services has raised its dividend for 1 consecutive years. United Security Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Burke & Herbert Financial Services beats United Security Bancshares on 12 of the 18 factors compared between the two stocks.
About United Security Bancshares
United Security Bancshares operates as the bank holding company for United Security Bank, a state-chartered bank that provides a range of commercial banking services to the business and professional community, and individuals in California. The company accepts various deposit products, including personal and business checking accounts, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificates of deposit. It also provides real estate mortgage, commercial and industrial, real estate construction and development, and consumer loans, as well as agricultural, installment, and student loans. In addition, the company offers online and mobile banking, safe deposit boxes, wire transfers, payroll direct deposit, cashier's check, cash management, and foreign draft services, as well as interactive teller machines; and person-to-person and bank-to-bank transfers for consumer customers. United Security Bancshares was founded in 1987 and is headquartered in Fresno, California.
About Burke & Herbert Financial Services
Burke Herbert Financial Services Corp. is a bank holding company, which engages in the provision of banking products and financial services to small to medium-sized businesses, their owners and employees, professional corporations, non-profits, and individuals. It operates through the following loan portfolio segments: Commercial Real Estate, Owner-Occupied Commercial Real Estate, Acquisition, Construction, and Development, Commercial and Industrial, Single Family Residential (1-4 Units), and Consumer Non-Real Estate and Other. The Commercial Real Estate segment includes leasing of the real estate collateral or income generated from the sale of the collateral. The Owner-Occupied Commercial Real Estate segment focuses on the operations of the business that occupies the property and the value of the collateral. The Acquisition, Construction, and Development segment offers creditworthiness of the borrower, project completion within budget, sale after completion, and the value of the collateral. The Commercial and Industrial segment is involved in the operations of the business and the value of the collateral. The Single Family Residential (1-4 Units) segment provides loans for investment purpose carry risk associated with the continued creditworthiness of the borrower, the value of the collateral, and either the net operating income generated from the lease of the real estate collateral or income generated from the sale of the collateral. The Consumer Non-Real Estate and Other segment covers loans carry risk associated with the creditworthiness of the borrower and the value of the collateral. The company was founded on September 14, 2022 and is headquartered in Alexandria, VA.
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