Head to Head Contrast: United Bancorp (NASDAQ:UBCP) & Independent Bank (NASDAQ:IBCP)

United Bancorp (NASDAQ:UBCP) and Independent Bank (NASDAQ:IBCP) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Analyst Ratings

This is a breakdown of recent recommendations for United Bancorp and Independent Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Bancorp	0	1	0	0	2.00
Independent Bank	0	3	1	0	2.25

Independent Bank has a consensus price target of $36.67, suggesting a potential upside of 9.09%. Given Independent Bank’s stronger consensus rating and higher possible upside, analysts plainly believe Independent Bank is more favorable than United Bancorp.

Risk and Volatility

United Bancorp has a beta of 0.34, meaning that its share price is 66% less volatile than the S&P 500. Comparatively, Independent Bank has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500.

Dividends

United Bancorp pays an annual dividend of $0.77 per share and has a dividend yield of 4.8%. Independent Bank pays an annual dividend of $1.12 per share and has a dividend yield of 3.3%. United Bancorp pays out 57.5% of its earnings in the form of a dividend. Independent Bank pays out 34.1% 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 and Independent Bank has increased its dividend for 11 consecutive years. United Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

15.4% of United Bancorp shares are held by institutional investors. Comparatively, 79.4% of Independent Bank shares are held by institutional investors. 12.9% of United Bancorp shares are held by insiders. Comparatively, 5.9% of Independent Bank shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares United Bancorp and Independent Bank”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	1.94	$7.75 million	$1.34	11.93
Independent Bank	$315.38 million	2.19	$68.54 million	$3.28	10.25

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
United Bancorp	16.32%	12.05%	0.91%
Independent Bank	21.73%	14.20%	1.26%

Summary

Independent Bank beats United Bancorp on 13 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 Independent Bank

Independent Bank Corporation operates as the bank holding company for Independent Bank that provides commercial banking services to individuals and businesses in rural and suburban communities in Michigan. It offers checking and savings accounts, commercial lending, direct and indirect consumer financing, mortgage lending, and safe deposit box services. The company also provides title insurance services and investment services, as well as automatic teller machines, and internet and mobile banking services. In addition, it operates through branches, drive-thru facilities, and loan production offices. Independent Bank Corporation was founded in 1864 and is based in Grand Rapids, Michigan.