First Bancorp (NASDAQ:FBNC) vs. United Bancorporation of Alabama (OTCMKTS:UBAB) Critical Survey

United Bancorporation of Alabama (OTCMKTS:UBAB) and First Bancorp (NASDAQ:FBNC) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, earnings, profitability, analyst recommendations, institutional ownership, valuation and dividends.

Institutional & Insider Ownership

5.5% of United Bancorporation of Alabama shares are held by institutional investors. Comparatively, 68.4% of First Bancorp shares are held by institutional investors. 3.7% of First Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares United Bancorporation of Alabama and First Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Bancorporation of Alabama	23.01%	15.20%	1.60%
First Bancorp	17.65%	8.96%	1.09%

Risk and Volatility

United Bancorporation of Alabama has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500. Comparatively, First Bancorp has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for United Bancorporation of Alabama and First Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Bancorporation of Alabama	0	0	0	0	0.00
First Bancorp	0	2	2	1	2.80

First Bancorp has a consensus target price of $53.6667, suggesting a potential upside of 2.63%. Given First Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe First Bancorp is more favorable than United Bancorporation of Alabama.

Dividends

United Bancorporation of Alabama pays an annual dividend of $1.40 per share and has a dividend yield of 2.5%. First Bancorp pays an annual dividend of $0.92 per share and has a dividend yield of 1.8%. United Bancorporation of Alabama pays out 22.0% of its earnings in the form of a dividend. First Bancorp pays out 39.3% 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 Bancorporation of Alabama is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares United Bancorporation of Alabama and First Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Bancorporation of Alabama	$97.72 million	1.86	$28.00 million	$6.35	8.70
First Bancorp	$537.14 million	4.04	$76.21 million	$2.34	22.35

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

Summary

First Bancorp beats United Bancorporation of Alabama on 11 of the 17 factors compared between the two stocks.

About United Bancorporation of Alabama

United Bancorporation of Alabama, Inc. operates as the bank holding company for United Bank that provides banking services. The company offers checking and savings accounts, certificates of deposit, individual retirement accounts, small business programs, business solutions, merchant services, and cash management services. It also provides various lending services, such as personal loans, business loans, lines of credit, and equipment loans; real estate loans for the agricultural community and working lines of credit; and overdraft services. In addition, the company offers debit cards, prepaid cards, Visa credit cards, gift cards, and safe deposit boxes. Further, it provides check cashing, convenience, remote deposit, mobile check deposit, personal storage compartments, Web payment options, insurance products, investment and brokerage, and online and mobile banking services. United Bancorporation of Alabama, Inc. was founded in 1904 and is based in Atmore, Alabama.

About First Bancorp

First Bancorp operates as the bank holding company for First Bank that provides banking products and services for individuals and small to medium-sized businesses. The company accepts deposit products, such as checking, savings, and money market accounts, as well as time deposits, including certificate of deposits and individual retirement accounts. It also offers loans for a range of consumer and commercial purposes comprising loans for business, real estate, personal, home improvement, and automobiles, as well as residential mortgages and small business administration loans; and accounts receivable financing and factoring, inventory financing, and purchase order financing services. In addition, the company provides credit and debit cards, letter of credits, and safe deposit box rental services, as well as electronic funds transfer services consisting of wire transfers; and internet and mobile banking, cash management, bank-by-phone services, and remote deposit capture services. Further, it offers investment and insurance products, such as mutual funds, annuities, long-term care insurance, life insurance, and company retirement plans, as well as property and casualty insurance products; and financial planning services. The company was founded in 1934 and is headquartered in Southern Pines, North Carolina.