Critical Comparison: Unity Bancorp (UNTY) vs. Its Rivals

Unity Bancorp (NASDAQ: UNTY) is one of 265 public companies in the “State commercial banks” industry, but how does it compare to its competitors? We will compare Unity Bancorp to related companies based on the strength of its risk, institutional ownership, valuation, earnings, dividends, analyst recommendations and profitability.

Analyst Ratings

This is a breakdown of current recommendations for Unity Bancorp and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Unity Bancorp 0 0 2 0 3.00
Unity Bancorp Competitors 2553 7268 5385 326 2.22

Unity Bancorp presently has a consensus target price of $26.75, indicating a potential upside of 29.23%. As a group, “State commercial banks” companies have a potential upside of 22.50%. Given Unity Bancorp’s stronger consensus rating and higher possible upside, research analysts plainly believe Unity Bancorp is more favorable than its competitors.

Earnings and Valuation

This table compares Unity Bancorp and its competitors revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Unity Bancorp $76.29 million $21.92 million 10.30
Unity Bancorp Competitors $1.45 billion $275.37 million 8.15

Unity Bancorp’s competitors have higher revenue and earnings than Unity Bancorp. Unity Bancorp is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Insider and Institutional Ownership

48.7% of Unity Bancorp shares are held by institutional investors. Comparatively, 47.9% of shares of all “State commercial banks” companies are held by institutional investors. 29.7% of Unity Bancorp shares are held by company insiders. Comparatively, 11.0% of shares of all “State commercial banks” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Unity Bancorp and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Unity Bancorp 28.43% 16.51% 1.44%
Unity Bancorp Competitors 22.70% 10.89% 1.20%

Volatility and Risk

Unity Bancorp has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, Unity Bancorp’s competitors have a beta of 0.76, indicating that their average stock price is 24% less volatile than the S&P 500.

Dividends

Unity Bancorp pays an annual dividend of $0.32 per share and has a dividend yield of 1.5%. Unity Bancorp pays out 15.9% of its earnings in the form of a dividend. As a group, “State commercial banks” companies pay a dividend yield of 2.5% and pay out 30.1% of their earnings in the form of a dividend. Unity Bancorp has raised its dividend for 5 consecutive years.

Summary

Unity Bancorp beats its competitors on 10 of the 15 factors compared.

Unity Bancorp Company Profile

Unity Bancorp, Inc. operates as the holding company for Unity Bank that provides a range of banking products and services to individuals, small and medium sized businesses, and professional communities. The company offers personal and business checking accounts, time deposits, money market accounts, and regular savings accounts. It also provides commercial, small business administration, consumer, mortgage, home equity, and personal loans. As of December 31, 2018, the company offered its financial services through 19 branch offices located in Bergen, Hunterdon, Middlesex, Somerset, Union, and Warren Counties in New Jersey, as well as Northampton County, Pennsylvania. Unity Bancorp, Inc. was founded in 1991 and is headquartered in Clinton, New Jersey.

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