Contrasting Sierra Bancorp (BSRR) and United Community Financial Corp. (UCFC)

Sierra Bancorp (NASDAQ: BSRR) and United Community Financial Corp. (NASDAQ:UCFC) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, profitability and valuation.

Earnings & Valuation

This table compares Sierra Bancorp and United Community Financial Corp.’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sierra Bancorp $89.33 million 3.88 $18.96 million $1.37 18.28
United Community Financial Corp. $91.25 million 4.78 $20.38 million $0.41 21.41

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

Profitability

This table compares Sierra Bancorp and United Community Financial Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sierra Bancorp 20.35% 9.13% 0.95%
United Community Financial Corp. 18.95% 8.90% 1.00%

Analyst Ratings

This is a breakdown of current ratings and price targets for Sierra Bancorp and United Community Financial Corp., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sierra Bancorp 0 2 2 0 2.50
United Community Financial Corp. 1 0 2 0 2.33

Sierra Bancorp presently has a consensus target price of $27.94, suggesting a potential upside of 11.57%. United Community Financial Corp. has a consensus target price of $10.50, suggesting a potential upside of 19.59%. Given United Community Financial Corp.’s higher possible upside, analysts plainly believe United Community Financial Corp. is more favorable than Sierra Bancorp.

Insider and Institutional Ownership

53.9% of Sierra Bancorp shares are held by institutional investors. Comparatively, 58.8% of United Community Financial Corp. shares are held by institutional investors. 15.2% of Sierra Bancorp shares are held by company insiders. Comparatively, 3.6% of United Community Financial Corp. shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Sierra Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 2.2%. United Community Financial Corp. pays an annual dividend of $0.16 per share and has a dividend yield of 1.8%. Sierra Bancorp pays out 40.9% of its earnings in the form of a dividend. United Community Financial Corp. pays out 39.0% 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.

Risk and Volatility

Sierra Bancorp has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500. Comparatively, United Community Financial Corp. has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.

Summary

Sierra Bancorp beats United Community Financial Corp. on 8 of the 15 factors compared between the two stocks.

About Sierra Bancorp

Sierra Bancorp is a bank holding company for Bank of the Sierra (the Bank). The Bank is a state-chartered bank, which offers a range of retail and commercial banking services. The Bank’s products and services are related to the business of lending money and accepting deposits. Its customers have access to electronic point-of-sale payment alternatives around the country through the Pulse Electronic Funds Transfer (EFT) network. Its Internet branch provides the ability to open deposit accounts online; an online banking option with bill-pay and mobile banking capabilities, including mobile check deposit; a customer service center that is accessible by toll-free telephone during business hours, and an automated telephone banking system. It offers a range of other banking products and services to complement and support its lending and deposit products, including remote deposit capture and automated payroll services for business customers.

About United Community Financial Corp.

United Community Financial Corp. is financial services holding company. The Company’s subsidiaries include The Home Savings and Loan Company of Youngstown, Ohio (Home Savings or the Bank), HSB Insurance, LLC and HSB Capital, LLC. The principal business of Home Savings is the origination of mortgage loans, including construction loans, on residential and nonresidential real estate located in Home Savings’ primary market area. In addition to real estate lending, Home Savings originates commercial loans and various types of consumer loans. Funds for lending and other investment activities are obtained primarily from retail deposits. HSB Insurance, LLC is an insurance agency that offers a range of insurance products for business and residential customers, which include, auto, homeowners, life-health, commercial, surety bonds and aviation. HSB Capital, LLC provides mezzanine funding for customers. Mezzanine loans are offered to customers in United Community’s market area.

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