Critical Contrast: Old National Bancorp (NASDAQ:ONB) & United Bancorp (NASDAQ:UBCP)

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

Profitability

This table compares Old National Bancorp and United Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Old National Bancorp	18.90%	15.41%	1.27%
United Bancorp	16.32%	12.05%	0.91%

Analyst Ratings

This is a summary of recent ratings for Old National Bancorp and United Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Old National Bancorp	0	3	8	0	2.73
United Bancorp	0	1	0	0	2.00

Old National Bancorp currently has a consensus price target of $27.91, indicating a potential upside of 18.51%. Given Old National Bancorp’s stronger consensus rating and higher possible upside, research analysts plainly believe Old National Bancorp is more favorable than United Bancorp.

Dividends

Old National Bancorp pays an annual dividend of $0.58 per share and has a dividend yield of 2.5%. United Bancorp pays an annual dividend of $0.77 per share and has a dividend yield of 4.8%. Old National Bancorp pays out 29.9% of its earnings in the form of a dividend. United Bancorp pays out 57.5% 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 increased its dividend for 13 consecutive years. United Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Old National Bancorp has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, United Bancorp has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500.

Institutional and Insider Ownership

83.7% of Old National Bancorp shares are owned by institutional investors. Comparatively, 15.4% of United Bancorp shares are owned by institutional investors. 0.7% of Old National Bancorp shares are owned by insiders. Comparatively, 13.9% of United Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Old National Bancorp and United Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Old National Bancorp	$2.74 billion	3.32	$669.26 million	$1.94	12.14
United Bancorp	$47.51 million	1.94	$7.75 million	$1.34	11.92

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

Summary

Old National Bancorp beats United Bancorp on 14 of the 17 factors compared between the two stocks.

About Old National Bancorp

Old National Bancorp operates as the bank holding company for Old National Bank that provides various financial services to individual and commercial customers in the United States. It accepts deposit accounts, including noninterest-bearing demand, interest-bearing checking, negotiable order of withdrawal, savings and money market, and time deposits; and offers loans, such as home equity lines of credit, residential real estate loans, consumer loans, commercial loans, commercial real estate loans, agricultural loans, letters of credit, and lease financing. The company also provides debit and automated teller machine cards, telephone access, online banking, and other electronic and mobile banking services; cash management, private banking, brokerage, trust, investment advisory, and other traditional banking services; wealth management, investment, and foreign currency services; and treasury management, merchant, and capital markets services, as well as community development lending and equity investment solutions. The company was founded in 1834 and is headquartered in Evansville, Indiana.

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.