Comparing United Financial Bancorp (UBNK) & Union Bankshares (UBSH)

United Financial Bancorp (NASDAQ: UBNK) and Union Bankshares (NASDAQ:UBSH) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, analyst recommendations and earnings.

Analyst Recommendations

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This is a summary of recent recommendations and price targets for United Financial Bancorp and Union Bankshares, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Financial Bancorp 0 3 1 0 2.25
Union Bankshares 0 2 2 1 2.80

United Financial Bancorp presently has a consensus price target of $19.33, indicating a potential upside of 16.82%. Union Bankshares has a consensus price target of $41.33, indicating a potential upside of 4.91%. Given United Financial Bancorp’s higher possible upside, research analysts plainly believe United Financial Bancorp is more favorable than Union Bankshares.

Institutional and Insider Ownership

66.2% of United Financial Bancorp shares are held by institutional investors. Comparatively, 46.7% of Union Bankshares shares are held by institutional investors. 3.5% of United Financial Bancorp shares are held by insiders. Comparatively, 2.2% of Union Bankshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares United Financial Bancorp and Union Bankshares’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
United Financial Bancorp $269.65 million 3.13 $54.62 million $1.08 15.32
Union Bankshares $401.87 million 6.45 $72.92 million $1.81 21.77

Union Bankshares has higher revenue and earnings than United Financial Bancorp. United Financial Bancorp is trading at a lower price-to-earnings ratio than Union Bankshares, indicating that it is currently the more affordable of the two stocks.

Dividends

United Financial Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 2.9%. Union Bankshares pays an annual dividend of $0.84 per share and has a dividend yield of 2.1%. United Financial Bancorp pays out 44.4% of its earnings in the form of a dividend. Union Bankshares pays out 46.4% 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 Financial Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

United Financial Bancorp has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500. Comparatively, Union Bankshares has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500.

Profitability

This table compares United Financial Bancorp and Union Bankshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
United Financial Bancorp 20.25% 8.41% 0.83%
Union Bankshares 18.15% 8.09% 0.93%

Summary

Union Bankshares beats United Financial Bancorp on 10 of the 17 factors compared between the two stocks.

United Financial Bancorp Company Profile

United Financial Bancorp, Inc. is a bank holding company. The Company, through its subsidiary United Bank (the Bank) and various subsidiaries, delivers financial services to individuals, families and businesses in Connecticut and Massachusetts, including retail, commercial and consumer banking, as well as financial advisory services. The Company’s operations include the delivery of loan and deposit products to customers. Personal and business banking customers also bank with the Company online through its Website at www.bankatunited.com, as well as its mobile and telephone banking channels. The Company originates commercial loans, commercial real estate loans, residential and commercial construction loans, residential real estate loans collateralized by one- to four-family residences, home equity lines of credit and fixed rate loans and other consumer loans. The principal lending activity of the Bank is to originate loans secured by first mortgages on one- to four-family residences.

Union Bankshares Company Profile

Union Bankshares Corporation is a financial holding company and bank holding company. The Company operates through two segments: a community bank segment and mortgage loan origination business segment. The Company offers financial services through its community bank subsidiary, Union Bank & Trust (the Bank) and three non-bank financial services affiliates. The Company’s non-bank financial services affiliates include Union Mortgage Group, Inc. (UMG), Union Insurance Group, LLC and Old Dominion Capital Management, Inc. The community bank segment included one subsidiary bank, which provided loan, investment, and trust services to retail and commercial customers throughout its 151 banking office, 40 of which are operated as Xenith Bank, a division of Union Bank & Trust of Richmond, Virginia, as of January 1, 2018. The mortgage segment includes UMG, which provides a range of mortgage loan products principally in Virginia, North Carolina, Maryland, and the Washington D.C. metro area.

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