United Community Financial Corp. (NASDAQ: UCFC) and Sierra Bancorp (NASDAQ:BSRR) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, profitabiliy, analyst recommendations, earnings and valuation.
This table compares United Community Financial Corp. and Sierra Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|United Community Financial Corp.||18.95%||9.10%||1.03%|
Risk and Volatility
United Community Financial Corp. has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500. Comparatively, Sierra Bancorp has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500.
This is a breakdown of current recommendations and price targets for United Community Financial Corp. and Sierra Bancorp, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|United Community Financial Corp.||1||0||2||0||2.33|
United Community Financial Corp. presently has a consensus target price of $10.50, indicating a potential upside of 14.38%. Sierra Bancorp has a consensus target price of $27.94, indicating a potential upside of 4.83%. Given United Community Financial Corp.’s higher probable upside, equities research analysts clearly believe United Community Financial Corp. is more favorable than Sierra Bancorp.
Institutional & Insider Ownership
58.6% of United Community Financial Corp. shares are held by institutional investors. Comparatively, 54.1% of Sierra Bancorp shares are held by institutional investors. 3.6% of United Community Financial Corp. shares are held by company insiders. Comparatively, 15.2% of Sierra Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
United Community Financial Corp. pays an annual dividend of $0.16 per share and has a dividend yield of 1.7%. Sierra Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 2.1%. United Community Financial Corp. pays out 39.0% of its earnings in the form of a dividend. Sierra Bancorp pays out 40.9% 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.
Valuation and Earnings
This table compares United Community Financial Corp. and Sierra Bancorp’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|United Community Financial Corp.||$91.25 million||5.00||$20.38 million||$0.41||22.39|
|Sierra Bancorp||$86.34 million||4.27||$18.95 million||$1.37||19.45|
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.
Sierra Bancorp beats United Community Financial Corp. on 8 of the 15 factors compared between the two stocks.
United Community Financial Corp. Company Profile
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.
Sierra Bancorp Company Profile
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.
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