United Bancorp (NASDAQ:UBCP) & Orrstown Financial Services (NASDAQ:ORRF) Head-To-Head Analysis

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

Volatility & Risk

Orrstown Financial Services has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500. Comparatively, United Bancorp has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500.

Dividends

Orrstown Financial Services pays an annual dividend of $1.20 per share and has a dividend yield of 2.8%. United Bancorp pays an annual dividend of $0.78 per share and has a dividend yield of 4.9%. Orrstown Financial Services pays out 27.0% of its earnings in the form of a dividend. United Bancorp pays out 56.5% 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 raised its dividend for 10 consecutive years and United Bancorp has raised its dividend for 13 consecutive years. United Bancorp 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 Orrstown Financial Services and United Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orrstown Financial Services	0	3	3	0	2.50
United Bancorp	0	0	1	0	3.00

Orrstown Financial Services presently has a consensus price target of $44.33, suggesting a potential upside of 4.46%. Given Orrstown Financial Services’ higher probable upside, equities analysts plainly believe Orrstown Financial Services is more favorable than United Bancorp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Orrstown Financial Services	24.00%	14.46%	1.56%
United Bancorp	16.55%	11.53%	0.92%

Earnings & Valuation

This table compares Orrstown Financial Services and United Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orrstown Financial Services	$356.05 million	2.34	$80.86 million	$4.45	9.54
United Bancorp	$47.51 million	1.90	$7.75 million	$1.38	11.42

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

Institutional and Insider Ownership

44.3% of Orrstown Financial Services shares are held by institutional investors. Comparatively, 15.4% of United Bancorp shares are held by institutional investors. 4.3% of Orrstown Financial Services shares are held by insiders. Comparatively, 13.9% of United Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Orrstown Financial Services beats United Bancorp on 12 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 United Bancorp

United Bancorp, Inc. operates as the bank holding company for Unified Bank that provides commercial and retail banking services in Ohio. The company provides range of banking and financial services, which includes accepting demand, savings, and time deposits. It also offers commercial, real estate and consumer loans. United Bancorp, Inc. was founded in 1902 and is headquartered in Martins Ferry, Ohio.