Burke & Herbert Financial Services (NASDAQ:BHRB) versus United Security Bancshares (NASDAQ:UBFO) Head-To-Head Review

Burke & Herbert Financial Services (NASDAQ:BHRB) and United Security Bancshares (NASDAQ:UBFO) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, valuation, profitability and risk.

Profitability

This table compares Burke & Herbert Financial Services and United Security Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Burke & Herbert Financial Services	18.86%	13.66%	1.46%
United Security Bancshares	18.65%	9.03%	1.01%

Dividends

Burke & Herbert Financial Services pays an annual dividend of $2.20 per share and has a dividend yield of 3.1%. United Security Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 4.6%. Burke & Herbert Financial Services pays out 35.3% of its earnings in the form of a dividend. United Security Bancshares pays out 67.6% 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. Burke & Herbert Financial Services has increased its dividend for 1 consecutive years and United Security Bancshares has increased its dividend for 2 consecutive years. United Security Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

30.9% of United Security Bancshares shares are held by institutional investors. 12.0% of Burke & Herbert Financial Services shares are held by company insiders. Comparatively, 22.1% of United Security Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Burke & Herbert Financial Services has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500. Comparatively, United Security Bancshares has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Burke & Herbert Financial Services and United Security Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Burke & Herbert Financial Services	0	3	2	1	2.67
United Security Bancshares	0	0	1	0	3.00

Burke & Herbert Financial Services currently has a consensus price target of $75.25, indicating a potential upside of 5.04%. Given Burke & Herbert Financial Services’ higher possible upside, equities research analysts clearly believe Burke & Herbert Financial Services is more favorable than United Security Bancshares.

Valuation and Earnings

This table compares Burke & Herbert Financial Services and United Security Bancshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Burke & Herbert Financial Services	$358.66 million	4.03	$117.31 million	$6.24	11.48
United Security Bancshares	$53.51 million	3.39	$12.29 million	$0.71	14.80

Burke & Herbert Financial Services has higher revenue and earnings than United Security Bancshares. Burke & Herbert Financial Services is trading at a lower price-to-earnings ratio than United Security Bancshares, indicating that it is currently the more affordable of the two stocks.

Summary

Burke & Herbert Financial Services beats United Security Bancshares on 12 of the 18 factors compared between the two stocks.

About Burke & Herbert Financial Services

Burke Herbert Financial Services Corp. is a bank holding company, which engages in the provision of banking products and financial services to small to medium-sized businesses, their owners and employees, professional corporations, non-profits, and individuals. It operates through the following loan portfolio segments: Commercial Real Estate, Owner-Occupied Commercial Real Estate, Acquisition, Construction, and Development, Commercial and Industrial, Single Family Residential (1-4 Units), and Consumer Non-Real Estate and Other. The Commercial Real Estate segment includes leasing of the real estate collateral or income generated from the sale of the collateral. The Owner-Occupied Commercial Real Estate segment focuses on the operations of the business that occupies the property and the value of the collateral. The Acquisition, Construction, and Development segment offers creditworthiness of the borrower, project completion within budget, sale after completion, and the value of the collateral. The Commercial and Industrial segment is involved in the operations of the business and the value of the collateral. The Single Family Residential (1-4 Units) segment provides loans for investment purpose carry risk associated with the continued creditworthiness of the borrower, the value of the collateral, and either the net operating income generated from the lease of the real estate collateral or income generated from the sale of the collateral. The Consumer Non-Real Estate and Other segment covers loans carry risk associated with the creditworthiness of the borrower and the value of the collateral. The company was founded on September 14, 2022 and is headquartered in Alexandria, VA.

About United Security Bancshares

United Security Bancshares operates as the bank 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. It also provides real estate mortgage, commercial and industrial, real estate construction and development, and consumer loans, as well as agricultural, installment, and student loans. In addition, the company offers online and mobile banking, safe deposit boxes, wire transfers, payroll direct deposit, cashier's check, cash management, and foreign draft services, as well as interactive teller machines; and person-to-person and bank-to-bank transfers for consumer customers. United Security Bancshares was founded in 1987 and is headquartered in Fresno, California.