Reviewing OceanFirst Financial (NASDAQ:OCFC) and United Bancshares (NASDAQ:UBOH)

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

Dividends

United Bancshares pays an annual dividend of $0.88 per share and has a dividend yield of 4.4%. OceanFirst Financial pays an annual dividend of $0.80 per share and has a dividend yield of 4.3%. United Bancshares pays out 31.3% of its earnings in the form of a dividend. OceanFirst Financial pays out 46.8% 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. United Bancshares is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent ratings and price targets for United Bancshares and OceanFirst Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Bancshares	0	0	0	0	N/A
OceanFirst Financial	0	3	2	0	2.40

OceanFirst Financial has a consensus price target of $18.90, suggesting a potential upside of 1.67%. Given OceanFirst Financial’s higher probable upside, analysts plainly believe OceanFirst Financial is more favorable than United Bancshares.

Profitability

This table compares United Bancshares and OceanFirst Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Bancshares	14.16%	N/A	N/A
OceanFirst Financial	14.78%	5.85%	0.72%

Volatility & Risk

United Bancshares has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500. Comparatively, OceanFirst Financial has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.

Earnings and Valuation

This table compares United Bancshares and OceanFirst Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Bancshares	$54.58 million	1.08	$8.61 million	$2.81	7.05
OceanFirst Financial	$388.93 million	2.81	$104.03 million	$1.71	10.87

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

Insider & Institutional Ownership

1.0% of United Bancshares shares are owned by institutional investors. Comparatively, 71.0% of OceanFirst Financial shares are owned by institutional investors. 6.6% of United Bancshares shares are owned by company insiders. Comparatively, 5.0% of OceanFirst Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

OceanFirst Financial beats United Bancshares on 11 of the 15 factors compared between the two stocks.

About United Bancshares

United Bancshares, Inc. operates as the bank holding company for The Union Bank Company that provides various commercial and consumer banking services. The company accepts various deposits products, such as checking, savings, demand deposit, money market deposit, term certificate, and individual retirement accounts, as well as certificates of deposit. Its loan products include commercial and residential real estate, agricultural, commercial and industrial, home equity, and various types of consumer and small business administration loans. In addition, the company offers wealth management, financial needs analysis, mutual funds, securities trading, annuities, and life insurance services; and treasury management, online and mobile banking, automatic teller machine, bill pay, safe deposit box rental, payment, and other personalized services. It also operates full service banking centers and loan production offices in northwest and central Ohio. United Bancshares, Inc. was founded in 1904 and is headquartered in Columbus Grove, Ohio.

About OceanFirst Financial

OceanFirst Financial Corp. operates as the bank holding company for OceanFirst Bank N.A. that provides community banking services to retail and commercial customers. It accepts money market accounts, savings accounts, interest-bearing checking accounts, non-interest-bearing accounts, and time deposits, that includes brokered deposits to retail, government, and business customers. The company also offers commercial real estate, multi-family, land loans, construction, and commercial and industrial loans; fixed-rate and adjustable-rate mortgage loans that are secured by one-to-four family residences; and consumer loans, such as home equity loans and lines of credit, student loans, overdraft line of credit, loans on savings accounts, and other consumer loans. In addition, it invests in mortgage-backed securities, securities issued by the U.S. Government and agencies, corporate securities, and other investments. Further, the company offers bankcard, trust and asset management services; and bank owned life insurance products. The company was founded in 1902 and is based in Red Bank, New Jersey.