First Commonwealth Financial (NYSE:FCF) and United Security Bancshares (NASDAQ:UBFO) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, earnings, risk and analyst recommendations.
Institutional & Insider Ownership
68.3% of First Commonwealth Financial shares are held by institutional investors. Comparatively, 24.8% of United Security Bancshares shares are held by institutional investors. 1.5% of First Commonwealth Financial shares are held by insiders. Comparatively, 21.5% of United Security Bancshares shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This is a summary of recent recommendations for First Commonwealth Financial and United Security Bancshares, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|First Commonwealth Financial||0||3||2||0||2.40|
|United Security Bancshares||0||0||0||0||N/A|
First Commonwealth Financial presently has a consensus price target of $16.50, indicating a potential upside of 23.04%. Given First Commonwealth Financial’s higher possible upside, equities research analysts plainly believe First Commonwealth Financial is more favorable than United Security Bancshares.
This table compares First Commonwealth Financial and United Security Bancshares’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|First Commonwealth Financial||27.84%||11.25%||1.41%|
|United Security Bancshares||34.22%||13.74%||1.62%|
Earnings and Valuation
This table compares First Commonwealth Financial and United Security Bancshares’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|First Commonwealth Financial||$380.89 million||3.47||$107.50 million||$1.10||12.19|
|United Security Bancshares||$41.22 million||4.31||$14.02 million||N/A||N/A|
First Commonwealth Financial has higher revenue and earnings than United Security Bancshares.
First Commonwealth Financial pays an annual dividend of $0.40 per share and has a dividend yield of 3.0%. United Security Bancshares pays an annual dividend of $0.44 per share and has a dividend yield of 4.2%. First Commonwealth Financial pays out 36.4% of its earnings in the form of a dividend. First Commonwealth Financial has increased its dividend for 2 consecutive years.
Volatility and Risk
First Commonwealth Financial has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, United Security Bancshares has a beta of 0.3, meaning that its share price is 70% less volatile than the S&P 500.
First Commonwealth Financial beats United Security Bancshares on 8 of the 15 factors compared between the two stocks.
About First Commonwealth Financial
First Commonwealth Financial Corporation, through its subsidiaries, provides consumer and commercial banking services to individuals, and small and mid-sized businesses in the United States. Its consumer services include personal checking accounts, interest-earning checking accounts, savings accounts, insured money market accounts, debit cards, investment certificates, fixed and variable rate certificates of deposit, mortgage loans, secured and unsecured installment loans, construction and real estate loans, safe deposit facilities, credit cards, credit lines with overdraft checking protection, IRA accounts, and automated teller machine (ATM) services, as well as Internet, mobile, and telephone banking services. The company's commercial banking services comprise commercial lending, business checking accounts, online account management services, payroll direct deposits, commercial cash management services, and repurchase agreements, as well as ACH origination services. It also offers various trust and asset management services; auto, home, and business insurance, as well as term life insurance; and annuities, mutual funds, and stock and bond brokerage services through a broker-dealer and insurance brokers. As of March 4, 2019, the company operated 137 community banking offices in western and central Pennsylvania, as well as northeastern, central, and southwestern Ohio. It also leases 3 mortgage loan production offices and 3 corporate loan production offices, as well as operates a network of 150 automated teller machines. First Commonwealth Financial Corporation was founded in 1934 and is headquartered in Indiana, Pennsylvania.
About United Security Bancshares
United Security Bancshares operates as the holding company for United Security Bank, a state-chartered bank that provides a range of commercial banking services to the business and professional community, and individuals in California. The company accepts various deposit products, including personal and business checking accounts, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificates of deposit. Its loan portfolio comprises real estate mortgage, commercial and industrial, real estate construction, and consumer loans, as well as agricultural and installment loans. The company also offers cashier's check, traveler's check, money order, foreign draft, online and mobile banking, safe deposit box, payroll direct deposit, and interactive teller and ATM services. As of January 23, 2019, it operated through 11 full-service branch offices in Fresno, Bakersfield, Campbell, Caruthers, Coalinga, Firebaugh, Oakhurst, San Joaquin, and Taft, California. The company was founded in 1987 and is headquartered in Fresno, California.
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