United Financial Bancorp (NASDAQ:UBNK) and Berkshire Hills Bancorp (NYSE:BHLB) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, profitability and institutional ownership.

Insider & Institutional Ownership

66.5% of United Financial Bancorp shares are owned by institutional investors. Comparatively, 76.3% of Berkshire Hills Bancorp shares are owned by institutional investors. 3.4% of United Financial Bancorp shares are owned by company insiders. Comparatively, 1.6% of Berkshire Hills Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for United Financial Bancorp and Berkshire Hills Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Financial Bancorp 0 2 1 0 2.33
Berkshire Hills Bancorp 0 6 1 0 2.14

United Financial Bancorp currently has a consensus price target of $20.50, indicating a potential upside of 22.10%. Berkshire Hills Bancorp has a consensus price target of $40.50, indicating a potential downside of 0.98%. Given United Financial Bancorp’s stronger consensus rating and higher possible upside, equities analysts plainly believe United Financial Bancorp is more favorable than Berkshire Hills Bancorp.

Risk & Volatility

United Financial Bancorp has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Berkshire Hills Bancorp has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500.

Profitability

This table compares United Financial Bancorp and Berkshire Hills Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
United Financial Bancorp 19.61% 8.42% 0.82%
Berkshire Hills Bancorp 14.79% 8.02% 1.02%

Dividends

United Financial Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 2.9%. Berkshire Hills Bancorp pays an annual dividend of $0.88 per share and has a dividend yield of 2.2%. United Financial Bancorp pays out 42.9% of its earnings in the form of a dividend. Berkshire Hills Bancorp pays out 38.4% 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. Berkshire Hills Bancorp has raised its dividend for 3 consecutive years.

Valuation and Earnings

This table compares United Financial Bancorp and Berkshire Hills Bancorp’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
United Financial Bancorp $269.65 million 3.18 $54.61 million $1.12 14.99
Berkshire Hills Bancorp $485.95 million 3.82 $55.24 million $2.29 17.86

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

Summary

Berkshire Hills Bancorp beats United Financial Bancorp on 10 of the 16 factors compared between the two stocks.

United Financial Bancorp Company Profile

United Financial Bancorp, Inc. operates as the holding company for United Bank that provides retail, commercial, and consumer banking services to individuals, families, and businesses. The company accepts various deposits, such as interest-bearing checking, non-interest-bearing checking, regular savings, money market savings, and time deposits. Its loan products include commercial loans, commercial real estate loans, residential and commercial construction loans, residential real estate loans collateralized by one-to-four family residences, home equity lines of credit, fixed rate loans, marine floor plan loans, and other consumer loans. In addition, the company provides various financial advisory services. It has 53 banking offices, 64 ATMs, and 7 loan production offices in Connecticut and Massachusetts. The company was formerly known as Rockville Financial, Inc. and changed its name to United Financial Bancorp, Inc. in April 2014. United Financial Bancorp, Inc. was founded in 1858 and is headquartered in Hartford, Connecticut.

Berkshire Hills Bancorp Company Profile

Berkshire Hills Bancorp, Inc. operates as a bank holding company for Berkshire Bank that provides various banking products and services. It offers various deposit accounts, including demand deposit, NOW, regular savings, money market savings, time certificates of deposit, and retirement deposit accounts; and loans, such as commercial real estate, commercial and industrial, consumer, and residential mortgage loans. The company also provides wealth management services comprising investment management, trust administration, and estate planning; and investment products, financial planning, and brokerage services. In addition, it provides retail and commercial electronic banking, commercial cash management, online banking, and mobile banking services; interest rate swaps; and debit cards and other electronic fee producing payment services to transaction account customers. Further, the company, through its subsidiary, Berkshire Insurance Group, Inc., offers personal and commercial property, and casualty insurance; employee benefits insurance; and life, health, and financial services insurance products. It serves retail, commercial, not- profit, and municipal deposit customers. As of December 31, 2017, the company operated 113 full-service branches in Massachusetts, New York, Connecticut, Vermont, Central New Jersey, and Eastern Pennsylvania. Berkshire Hills Bancorp, Inc. was founded in 1846 and is headquartered in Boston, Massachusetts.

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