First Connecticut Bancorp (NASDAQ: FBNK) and United Community Financial (NASDAQ:UCFC) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, profitability, institutional ownership and earnings.
Valuation & Earnings
This table compares First Connecticut Bancorp and United Community Financial’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|First Connecticut Bancorp||$111.98 million||3.71||$16.18 million||$1.32||19.66|
|United Community Financial||$118.75 million||4.40||$21.78 million||$0.57||18.39|
United Community Financial has higher revenue and earnings than First Connecticut Bancorp. United Community Financial is trading at a lower price-to-earnings ratio than First Connecticut Bancorp, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
First Connecticut Bancorp has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500. Comparatively, United Community Financial has a beta of 0.41, suggesting that its stock price is 59% less volatile than the S&P 500.
First Connecticut Bancorp pays an annual dividend of $0.64 per share and has a dividend yield of 2.5%. United Community Financial pays an annual dividend of $0.24 per share and has a dividend yield of 2.3%. First Connecticut Bancorp pays out 48.5% of its earnings in the form of a dividend. United Community Financial pays out 42.1% 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.
This table compares First Connecticut Bancorp and United Community Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|First Connecticut Bancorp||14.85%||8.07%||0.72%|
|United Community Financial||23.20%||11.04%||1.23%|
Insider and Institutional Ownership
46.8% of First Connecticut Bancorp shares are owned by institutional investors. Comparatively, 59.5% of United Community Financial shares are owned by institutional investors. 10.8% of First Connecticut Bancorp shares are owned by company insiders. Comparatively, 4.2% of United Community Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This is a summary of recent recommendations and price targets for First Connecticut Bancorp and United Community Financial, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|First Connecticut Bancorp||0||0||1||0||3.00|
|United Community Financial||0||1||1||0||2.50|
First Connecticut Bancorp currently has a consensus price target of $26.00, indicating a potential upside of 0.19%. United Community Financial has a consensus price target of $10.50, indicating a potential upside of 0.19%. Given First Connecticut Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe First Connecticut Bancorp is more favorable than United Community Financial.
United Community Financial beats First Connecticut Bancorp on 8 of the 15 factors compared between the two stocks.
First Connecticut Bancorp Company Profile
First Connecticut Bancorp, Inc. operates as the holding company for Farmington Bank that provides various consumer and commercial banking services to businesses and individuals in the United States. The company offers various deposit instruments, including checking, savings, money market savings, and negotiable order of withdrawal accounts, as well as fixed-rate time deposits. It also provides one-to-four family residential real estate loans; commercial real estate loans; construction loans, such as commercial construction loans and real estate subdivision development loans to developers, licensed contractors, and builders for the construction and development of commercial real estate projects and residential properties, as well as loans to individuals and contractors for the construction and acquisition of personal residences; and commercial loans comprising term loans, revolving lines of credit for working capital needs, equipment lines of credit to facilitate the purchase of equipment, and letters of credit. In addition, the company offers home equity loans and home equity lines of credit secured by owner-occupied one-to-four family residences; and installment and collateral consumer loans on new and used automobiles, loans collateralized by deposit accounts, and unsecured personal loans, as well as demand, revolving credit, and resort loans. Further, it provides wealth management and ATM services. As of February 27, 2018, the company operated 24 branch locations in central Connecticut and western Massachusetts. First Connecticut Bancorp, Inc. was founded in 1851 and is based in Farmington, Connecticut.
United Community Financial Company Profile
United Community Financial Corp. operates as the holding company for The Home Savings and Loan Company of Youngstown that provides consumer and business banking services. The company offers various deposit instruments, including checking accounts, regular savings accounts, money market accounts, individual retirement accounts, and certificates of deposit. It provides commercial loans, such as multifamily loans; nonresidential real estate loans comprising retail centers, office buildings, and industrial buildings; land loans; loans for the construction of multifamily properties, nonresidential real estate projects, and to builders; and secured and unsecured loans, including traditional lines of credit, revolving lines of credit, and term loans. The company also offers residential mortgage loans consisting of one-to four-family loans; loans for the construction of one-to four-family residences; and consumer loans, such as home equity loans, home equity lines of credit, recreational vehicle loans, unsecured loans, and cash-secured loans. In addition, it provides insurance products for business and residential customers, including auto, homeowners, life-health, commercial, surety bonds, and aviation. The company offers services through its main office located in Youngstown, Ohio; and 35 retail banking offices, 3 wealth management offices, and 13 residential mortgage loan centers located in Ohio, Western Pennsylvania, and West Virginia.United Community Financial Corp. was founded in 1889 and is based in Youngstown, Ohio.
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