United Community Financial (NASDAQ:UCFC) and Home Financial Bancorp (OTCMKTS:HWEN) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Profitability

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

Net Margins Return on Equity Return on Assets
United Community Financial 24.80% 11.87% 1.30%
Home Financial Bancorp N/A N/A N/A

Institutional and Insider Ownership

63.1% of United Community Financial shares are held by institutional investors. 4.2% of United Community Financial shares are held by insiders. Comparatively, 93.4% of Home Financial Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares United Community Financial and Home Financial Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
United Community Financial $118.75 million 3.71 $21.78 million $0.57 15.56
Home Financial Bancorp N/A N/A $160,000.00 N/A N/A

United Community Financial has higher revenue and earnings than Home Financial Bancorp.

Risk and Volatility

United Community Financial has a beta of 0.48, suggesting that its stock price is 52% less volatile than the S&P 500. Comparatively, Home Financial Bancorp has a beta of 0.18, suggesting that its stock price is 82% less volatile than the S&P 500.

Dividends

United Community Financial pays an annual dividend of $0.28 per share and has a dividend yield of 3.2%. Home Financial Bancorp pays an annual dividend of $0.16 per share and has a dividend yield of 2.6%. United Community Financial pays out 49.1% of its earnings in the form of a dividend. United Community Financial has raised its dividend for 2 consecutive years. United Community Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and price targets for United Community Financial and Home Financial Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Community Financial 0 1 1 0 2.50
Home Financial Bancorp 0 0 0 0 N/A

United Community Financial presently has a consensus target price of $12.00, indicating a potential upside of 35.29%. Given United Community Financial’s higher probable upside, analysts plainly believe United Community Financial is more favorable than Home Financial Bancorp.

Summary

United Community Financial beats Home Financial Bancorp on 11 of the 14 factors compared between the two stocks.

United Community Financial Company Profile

United Community Financial Corp. operates as the holding company for Home Savings Bank that provides consumer and business banking services. The company offers various deposit instruments, including checking accounts, regular savings accounts, money market accounts, individual retirement accounts, and certificates of deposit. It provides commercial loans, such as multifamily loans; nonresidential real estate loans comprising retail centers, office buildings, and industrial buildings; land loans; loans for the construction of multifamily properties, nonresidential real estate projects, and to builders; and secured and unsecured loans, including traditional lines of credit, revolving lines of credit, and term loans. The company also offers residential mortgage loans consisting of one-to four-family loans; loans for the construction of one-to four-family residences; and consumer loans, such as home equity loans, home equity lines of credit, recreational vehicle loans, unsecured loans, and cash-secured loans. In addition, it provides insurance products for business and residential customers, including auto, homeowners, life-health, commercial, surety bonds, and aviation. The company offers services through its main office located in Youngstown, Ohio; and 35 retail banking offices, 3 wealth management offices, and 13 residential mortgage loan centers located in Ohio, Western Pennsylvania, and West Virginia. United Community Financial Corp. was founded in 1889 and is based in Youngstown, Ohio.

Home Financial Bancorp Company Profile

Home Financial Bancorp operates as a holding company for Our Community Bank that offers various banking products and services in the United States. The company offers various deposits products, including demand deposits, savings accounts, NOW accounts, and money market deposits; commercial and industrial loans, nonresidential real estate loans, and residential, mobile home and land, and consumer loans. It also provides auto and hazard insurance; and Internet banking services. The company provides banking services primarily in Owen, Putnam, and other counties. Home Financial Bancorp was founded in 1911 and is based in Spencer, Indiana.

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