Comparing Orrstown Financial Services (NASDAQ:ORRF) & University Bancorp (OTCMKTS:UNIB)

University Bancorp (OTCMKTS:UNIB) and Orrstown Financial Services (NASDAQ:ORRF) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, valuation, profitability, dividends, risk and analyst recommendations.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
University Bancorp	$125.26 million	0.66	$10.47 million	N/A	N/A
Orrstown Financial Services	$286.37 million	2.30	$22.05 million	$1.96	17.23

Orrstown Financial Services has higher revenue and earnings than University Bancorp.

Insider & Institutional Ownership

44.3% of Orrstown Financial Services shares are held by institutional investors. 63.7% of University Bancorp shares are held by insiders. Comparatively, 4.7% of Orrstown Financial Services shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for University Bancorp and Orrstown Financial Services, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
University Bancorp	0	0	0	0	0.00
Orrstown Financial Services	0	0	4	0	3.00

Orrstown Financial Services has a consensus price target of $38.00, indicating a potential upside of 12.51%. Given Orrstown Financial Services’ stronger consensus rating and higher possible upside, analysts clearly believe Orrstown Financial Services is more favorable than University Bancorp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
University Bancorp	N/A	N/A	N/A
Orrstown Financial Services	9.74%	14.35%	1.35%

Volatility & Risk

University Bancorp has a beta of 0.16, suggesting that its share price is 84% less volatile than the S&P 500. Comparatively, Orrstown Financial Services has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500.

Dividends

University Bancorp pays an annual dividend of $0.20 per share and has a dividend yield of 1.3%. Orrstown Financial Services pays an annual dividend of $1.04 per share and has a dividend yield of 3.1%. Orrstown Financial Services pays out 53.1% of its earnings in the form of a dividend. Orrstown Financial Services has increased its dividend for 10 consecutive years. Orrstown Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Orrstown Financial Services beats University Bancorp on 13 of the 15 factors compared between the two stocks.

About University Bancorp

University Bancorp, Inc. operates as the bank holding company for University Bank that provides various personal, business, and community banking services in the United States. It offers checking, NOW, savings, money market, time deposit, and certificates of deposit accounts. The company's consumer loans include home equity, short term, automobile, personal, and recreational vehicle loans, as well as home equity lines of credits; SBA, commercial real estate, equipment, home improvement, and other instalment loans; and non-profit loans, as well as working capital lines of credit. In addition, the company provides foreign currency exchange; reverse mortgage; online banking and bill pay; online reorder checks; wire transfer; and courier services, as well as credit card and ATM services. Further, it offers life, health, property, and casualty insurance products, as well as investment products, including annuities. University Bancorp, Inc. was founded in 1890 and is based in Ann Arbor, Michigan.

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.