Head-To-Head Review: United Security Bancshares (NASDAQ:UBFO) versus FS Bancorp (NASDAQ:FSBW)

FS Bancorp (NASDAQ:FSBW) and United Security Bancshares (NASDAQ:UBFO) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, earnings, risk and analyst recommendations.

Volatility and Risk

FS Bancorp has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, United Security Bancshares has a beta of 0.42, meaning that its share price is 58% less volatile than the S&P 500.

Earnings & Valuation

This table compares FS Bancorp and United Security Bancshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FS Bancorp	$206.39 million	1.46	$35.02 million	$4.21	9.40
United Security Bancshares	$65.46 million	2.43	$14.78 million	$0.66	13.79

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

Dividends

FS Bancorp pays an annual dividend of $1.12 per share and has a dividend yield of 2.8%. United Security Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 5.3%. FS Bancorp pays out 26.6% of its earnings in the form of a dividend. United Security Bancshares pays out 72.7% 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. FS Bancorp has raised its dividend for 12 consecutive years and United Security Bancshares has raised its dividend for 2 consecutive years.

Institutional & Insider Ownership

63.9% of FS Bancorp shares are held by institutional investors. Comparatively, 30.9% of United Security Bancshares shares are held by institutional investors. 12.7% of FS Bancorp shares are held by insiders. Comparatively, 22.1% of United Security Bancshares shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares FS Bancorp and United Security Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FS Bancorp	15.88%	11.32%	1.09%
United Security Bancshares	17.07%	8.43%	0.92%

Analyst Recommendations

This is a breakdown of current recommendations for FS Bancorp and United Security Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FS Bancorp	0	1	1	0	2.50
United Security Bancshares	0	0	1	0	3.00

FS Bancorp currently has a consensus price target of $44.00, suggesting a potential upside of 11.14%. Given FS Bancorp’s higher probable upside, research analysts plainly believe FS Bancorp is more favorable than United Security Bancshares.

Summary

FS Bancorp beats United Security Bancshares on 10 of the 16 factors compared between the two stocks.

About FS Bancorp

FS Bancorp, Inc. operates as a bank holding company for 1st Security Bank of Washington that provides banking and financial services to local families, local and regional businesses, and industry niches. The company operates in two segments, Commercial and Consumer Banking; and Home Lending. It offers various deposit instruments, including checking accounts, money market deposit accounts, savings accounts, and certificates of deposit. The company provides one-to-four-family residential first mortgages, second mortgage/home equity loan products, non-mortgage commercial business loans, commercial real estate loans, and construction and development loans, as well as consumer loans, which primarily include personal lines of credit, credit cards, automobile, direct home improvement, loans on deposit, and recreational loans. It operates full bank service branches and home loan production offices in suburban communities in the greater Puget Sound area, including Snohomish, King, Pierce, Jefferson, Kitsap, Clallam, Grays Harbor, and Thurston counties; and a loan production office in the market area of the Tri-Cities. FS Bancorp, Inc. was founded in 1936 and is headquartered in Mountlake Terrace, Washington.

About United Security Bancshares

United Security Bancshares operates as the bank holding company for United Security Bank, a state-chartered bank that provides a range of commercial banking services to the business and professional community, and individuals in California. The company accepts various deposit products, including personal and business checking accounts, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificates of deposit. It also provides real estate mortgage, commercial and industrial, real estate construction and development, and consumer loans, as well as agricultural, installment, and student loans. In addition, the company offers online and mobile banking, safe deposit boxes, wire transfers, payroll direct deposit, cashier's check, cash management, and foreign draft services, as well as interactive teller machines; and person-to-person and bank-to-bank transfers for consumer customers. United Security Bancshares was founded in 1987 and is headquartered in Fresno, California.