United Bancorp (NASDAQ:UBCP – Get Free Report) and Arrow Financial (NASDAQ:AROW – Get Free Report) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, earnings, profitability, institutional ownership, dividends, analyst recommendations and valuation.
Earnings and Valuation
This table compares United Bancorp and Arrow Financial”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| United Bancorp | $47.51 million | 1.73 | $7.75 million | $1.38 | 10.37 |
| Arrow Financial | $242.58 million | 2.80 | $43.95 million | $3.10 | 11.84 |
Risk & Volatility
United Bancorp has a beta of 0.31, suggesting that its share price is 69% less volatile than the S&P 500. Comparatively, Arrow Financial has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500.
Institutional & Insider Ownership
15.4% of United Bancorp shares are owned by institutional investors. Comparatively, 46.7% of Arrow Financial shares are owned by institutional investors. 13.9% of United Bancorp shares are owned by insiders. Comparatively, 3.5% of Arrow Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Profitability
This table compares United Bancorp and Arrow Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| United Bancorp | 16.55% | 11.53% | 0.92% |
| Arrow Financial | 20.56% | 12.13% | 1.17% |
Dividends
United Bancorp pays an annual dividend of $0.79 per share and has a dividend yield of 5.5%. Arrow Financial pays an annual dividend of $1.20 per share and has a dividend yield of 3.3%. United Bancorp pays out 57.2% of its earnings in the form of a dividend. Arrow Financial pays out 38.7% 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 Bancorp has raised its dividend for 13 consecutive years and Arrow Financial has raised its dividend for 7 consecutive years. United Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a summary of recent recommendations for United Bancorp and Arrow Financial, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| United Bancorp | 0 | 1 | 0 | 0 | 2.00 |
| Arrow Financial | 0 | 3 | 3 | 0 | 2.50 |
Arrow Financial has a consensus price target of $41.62, suggesting a potential upside of 13.45%. Given Arrow Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Arrow Financial is more favorable than United Bancorp.
Summary
Arrow Financial beats United Bancorp on 14 of the 17 factors compared between the two stocks.
About United Bancorp
United Bancorp, Inc. operates as the bank holding company for Unified Bank that provides commercial and retail banking services in Ohio. The company provides range of banking and financial services, which includes accepting demand, savings, and time deposits. It also offers commercial, real estate and consumer loans. United Bancorp, Inc. was founded in 1902 and is headquartered in Martins Ferry, Ohio.
About Arrow Financial
Arrow Financial Corporation, a bank holding company, provides commercial and consumer banking, and financial products and services. The company’s deposit products include demand deposits, interest-bearing checking accounts, savings deposits, time deposits, and other time deposits. Its lending activities comprise commercial loans, such as term loans, time notes, and lines of credit; and commercial real estate loans to finance real estate purchases, refinancing, expansions, and enhancement to commercial properties, as well as commercial construction and land development loans to finance projects. The company’s lending activities also include consumer installment loans to finance personal expenditures, personal lines of credit, overdraft protection, and automobile loans; and residential real estate loans, fixed home equity loans, and home equity lines of credit for consumers to finance home improvements, debt consolidation, education, and other uses. In addition, it maintains an indirect lending program. Further, the company provides retirement planning, trust, and estate administration services for individuals, as well as pension, profit-sharing, and employee benefit plan administration services for corporations. Additionally, it offers insurance agency services comprising group health care policies and life insurance, and property and casualty insurance products; and investment advisory services to its proprietary mutual funds, as well as holds a real estate investment trust. It operates in the northeastern region of New York State in Warren, Washington, Saratoga, Essex, Clinton, Rensselaer, Albany, and Schenectady counties. Arrow Financial Corporation was founded in 1851 and is headquartered in Glens Falls, New York.
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