Analyzing German American Bancorp (NASDAQ:GABC) and United Bancorp (NASDAQ:UBCP)

German American Bancorp (NASDAQ:GABC) and United Bancorp (NASDAQ:UBCP) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and price targets for German American Bancorp and United Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
German American Bancorp	0	2	1	0	2.33
United Bancorp	0	1	0	0	2.00

German American Bancorp currently has a consensus price target of $45.50, suggesting a potential upside of 18.09%. Given German American Bancorp’s stronger consensus rating and higher probable upside, research analysts clearly believe German American Bancorp is more favorable than United Bancorp.

Risk & Volatility

German American Bancorp has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500. Comparatively, United Bancorp has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500.

Dividends

German American Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 3.0%. United Bancorp pays an annual dividend of $0.75 per share and has a dividend yield of 5.7%. German American Bancorp pays out 40.6% of its earnings in the form of a dividend. United Bancorp pays out 57.7% 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. German American Bancorp has raised its dividend for 13 consecutive years and United Bancorp has raised its dividend for 13 consecutive years.

Institutional & Insider Ownership

46.9% of German American Bancorp shares are held by institutional investors. Comparatively, 15.4% of United Bancorp shares are held by institutional investors. 4.6% of German American Bancorp shares are held by insiders. Comparatively, 12.9% of United Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
German American Bancorp	22.19%	12.40%	1.53%
United Bancorp	16.44%	11.96%	0.90%

Valuation and Earnings

This table compares German American Bancorp and United Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
German American Bancorp	$330.60 million	4.37	$83.81 million	$2.86	13.47
United Bancorp	$31.13 million	2.43	$7.40 million	$1.30	10.06

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

Summary

German American Bancorp beats United Bancorp on 14 of the 16 factors compared between the two stocks.

About German American Bancorp

German American Bancorp, Inc. operates as a financial holding company for German American Bank that provides retail and commercial banking services. The company operates through three segments: Core Banking, Wealth Management Services, and Insurance Operations. The Core Banking segment accepts deposits from the general public; and originates consumer, commercial and agricultural, commercial and agricultural real estate, and residential mortgage loans, as well as sells residential mortgage loans in the secondary market. The Wealth Management segment provides trust, investment advisory, brokerage, and retirement planning services. The Insurance Operations segment offers a range of personal and corporate property and casualty insurance products. It also offers checking, saving, and individual retirement accounts; certificates of deposit; wire transfer; credit cards; home equity, mortgages, and small business; treasury management; and online and mobile banking, bill pay, digital wallet, mobile check deposit, credit score and report, money management, and estatements, as well as wealth advisory. German American Bancorp, Inc. was founded in 1910 and is based in Jasper, 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.