Reviewing USCB Financial (NASDAQ:USCB) and Veritex (NASDAQ:VBTX)

USCB Financial (NASDAQ:USCB) and Veritex (NASDAQ:VBTX) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.

Analyst Ratings

This is a summary of current recommendations and price targets for USCB Financial and Veritex, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
USCB Financial	0	0	3	1	3.25
Veritex	0	4	5	0	2.56

USCB Financial currently has a consensus target price of $22.00, suggesting a potential upside of 29.79%. Veritex has a consensus target price of $33.25, suggesting a potential upside of 9.88%. Given USCB Financial’s stronger consensus rating and higher possible upside, equities analysts clearly believe USCB Financial is more favorable than Veritex.

Valuation and Earnings

This table compares USCB Financial and Veritex”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
USCB Financial	$143.97 million	2.36	$24.67 million	$1.47	11.53
Veritex	$438.93 million	3.77	$107.24 million	$2.10	14.41

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

Risk & Volatility

USCB Financial has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500. Comparatively, Veritex has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500.

Profitability

This table compares USCB Financial and Veritex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
USCB Financial	19.51%	13.39%	1.13%
Veritex	14.83%	7.55%	0.96%

Insider and Institutional Ownership

61.3% of USCB Financial shares are owned by institutional investors. Comparatively, 88.3% of Veritex shares are owned by institutional investors. 49.5% of USCB Financial shares are owned by company insiders. Comparatively, 4.3% of Veritex shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

USCB Financial pays an annual dividend of $0.40 per share and has a dividend yield of 2.4%. Veritex pays an annual dividend of $0.88 per share and has a dividend yield of 2.9%. USCB Financial pays out 27.2% of its earnings in the form of a dividend. Veritex pays out 41.9% 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. USCB Financial has increased its dividend for 2 consecutive years and Veritex has increased its dividend for 1 consecutive years.

About USCB Financial

USCB Financial Holdings, Inc. operates as the bank holding company for U.S. Century Bank that engages in the provision of various personal and business banking products and services in the United States. It accepts various deposit products, including commercial and consumer checking, money market deposit, savings, and time deposit accounts, as well as certificates of deposit. It also offers loan products, such as small business administration loans, yacht financing, residential and commercial real estate loans; commercial and industrial loans; foreign bank loans; and secured and unsecured consumer loans comprising personal loans, overdrafts, and deposit account collateralized loans. The company also offers lockbox, treasury, commercial payments, cash management, and online banking services, as well as provides title insurance policies for real estate transactions. USCB Financial Holdings, Inc. was founded in 2002 and is headquartered in Miami, Florida.

About Veritex

Veritex Holdings, Inc. operates as the bank holding company for Veritex Community Bank that provides various commercial banking products and services to small and medium-sized businesses, and professionals. The company accepts deposit products include demand, savings, money market, and time accounts. Its loan products include commercial real estate and general commercial, mortgage warehouse loans, residential real estate, construction and land, farmland, paycheck protection program, 1-4 family residential, agricultural, multi-family residential, and consumer loans, as well as purchased receivables financing. The company also provides interest rate swap services; and a range of online banking solutions, such as access to account balances, online transfers, online bill payment and electronic delivery of customer statements, and ATMs, as well as mobile banking, mail, and personal appointment. In addition, it offers debit cards, night depository services, direct deposits, cashier’s checks, and letters of credit; treasury management services, including balance reporting, transfers between accounts, wire transfer initiation, automated clearinghouse origination, and stop payments; and cash management deposit products and services consisting of lockbox, remote deposit capture, positive pay, reverse positive pay, account reconciliation services, zero balance accounts, and sweep accounts. The company operates full-service branches located in the Dallas-Fort Worth metroplex, and the Houston metropolitan area. Veritex Holdings, Inc. was incorporated in 2009 and is headquartered in Dallas, Texas.