Contrasting Orrstown Financial Services (NASDAQ:ORRF) and Union Bankshares (NASDAQ:UNB)

Orrstown Financial Services (NASDAQ:ORRF) and Union Bankshares (NASDAQ:UNB) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Valuation and Earnings

This table compares Orrstown Financial Services and Union Bankshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orrstown Financial Services	$286.37 million	2.26	$22.05 million	$3.78	8.78
Union Bankshares	$77.68 million	1.30	$8.76 million	$2.04	10.84

Orrstown Financial Services has higher revenue and earnings than Union Bankshares. Orrstown Financial Services is trading at a lower price-to-earnings ratio than Union Bankshares, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

44.3% of Orrstown Financial Services shares are held by institutional investors. Comparatively, 14.8% of Union Bankshares shares are held by institutional investors. 4.7% of Orrstown Financial Services shares are held by insiders. Comparatively, 1.8% of Union Bankshares 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 Orrstown Financial Services and Union Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orrstown Financial Services	20.48%	14.66%	1.44%
Union Bankshares	11.17%	13.14%	0.61%

Volatility & Risk

Orrstown Financial Services has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Union Bankshares has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Orrstown Financial Services and Union Bankshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orrstown Financial Services	0	2	4	0	2.67
Union Bankshares	0	1	0	0	2.00

Orrstown Financial Services currently has a consensus target price of $39.25, suggesting a potential upside of 18.22%. Given Orrstown Financial Services’ stronger consensus rating and higher probable upside, equities analysts clearly believe Orrstown Financial Services is more favorable than Union Bankshares.

Dividends

Orrstown Financial Services pays an annual dividend of $1.08 per share and has a dividend yield of 3.3%. Union Bankshares pays an annual dividend of $1.44 per share and has a dividend yield of 6.5%. Orrstown Financial Services pays out 28.6% of its earnings in the form of a dividend. Union Bankshares pays out 70.6% 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. Orrstown Financial Services has increased its dividend for 10 consecutive years.

Summary

Orrstown Financial Services beats Union Bankshares on 15 of the 17 factors compared between the two stocks.

About Orrstown Financial Services

Orrstown Financial Services, Inc. operates as the financial holding company for Orrstown Bank that provides commercial banking and financial advisory services to retail, commercial, non-profit, and government clients in the United States. It accepts various deposits, including checking, savings, time, demand, and money market deposits, as well as certificates of deposit. The company also offers commercial loans, such as commercial real estate, equipment, construction, working capital, and other commercial purpose loans, as well as industrial loans; consumer loans, such as home equity and other consumer loans, as well as home equity lines of credit; residential mortgage loans; acquisition and development loans; municipal loans; and installment and other loans. In addition, it provides renders services as trustee, executor, administrator, guardian, managing agent, custodian, and investment advisor, as well as other fiduciary services under the Orrstown Financial Advisors name; and retail brokerage services through a third-party broker/dealer arrangement. Further, the company offers fiduciary, investment advisory, insurance, and brokerage services. Orrstown Financial Services, Inc. was founded in 1919 and is headquartered in Shippensburg, Pennsylvania.

About Union Bankshares

Union Bankshares, Inc. operates as the bank holding company for Union Bank that provides retail, commercial, and municipal banking products and services in northern Vermont and New Hampshire. It offers retail depository services, such as personal checking, savings, money market, IRA/SEP/KEOGH, and health savings accounts, as well as certificates of deposit. The company also provides commercial real estate loans; commercial loans for plant and equipment, working capital, real estate renovation, and other business purposes to business owners and investors; small business administration guaranteed loans; residential construction and mortgage loans; municipal financing, including loans and excess deposits secured by FHLBB letters of credit; and home improvement loans and overdraft checking privileges against preauthorized lines of credit. In addition, it offers online cash management services, including account reconciliation, credit card depository, automated clearing house origination, wire transfers, positive pay and night depository services; merchant credit card services for the deposit and immediate credit of sales drafts; remote deposit capture services; and online mortgage application and consumer deposit account opening services. Further, the company provides business checking accounts; standby letters of credit, bank checks or money orders, and safe deposit boxes; ATM cards and services; debit cards; telephone, internet, and mobile banking services, including bill pay; and wealth management, fiduciary, and trust services. It offers retail banking services to individuals; and commercial banking services to small and medium sized business corporations, limited liability companies, partnerships, and sole proprietorships, as well as nonprofit organizations, local municipalities, and school districts. Union Bankshares, Inc. was founded in 1891 and is headquartered in Morrisville, Vermont.