CF Bankshares (NASDAQ:CFBK) and Unity Bancorp (NASDAQ:UNTY) Head-To-Head Analysis

CF Bankshares (NASDAQ:CFBK) and Unity Bancorp (NASDAQ:UNTY) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Dividends

CF Bankshares pays an annual dividend of $0.32 per share and has a dividend yield of 1.3%. Unity Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 1.2%. CF Bankshares pays out 11.5% of its earnings in the form of a dividend. Unity Bancorp pays out 12.1% 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. CF Bankshares has increased its dividend for 4 consecutive years and Unity Bancorp has increased its dividend for 12 consecutive years. CF Bankshares is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

CF Bankshares has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500. Comparatively, Unity Bancorp has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500.

Insider and Institutional Ownership

41.1% of CF Bankshares shares are owned by institutional investors. Comparatively, 42.3% of Unity Bancorp shares are owned by institutional investors. 21.0% of CF Bankshares shares are owned by insiders. Comparatively, 29.7% of Unity Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares CF Bankshares and Unity Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CF Bankshares	14.20%	10.44%	0.85%
Unity Bancorp	29.85%	15.94%	1.76%

Valuation & Earnings

This table compares CF Bankshares and Unity Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CF Bankshares	$123.56 million	1.22	$13.39 million	$2.78	8.54
Unity Bancorp	$164.21 million	3.05	$41.45 million	$4.94	10.11

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

Analyst Recommendations

This is a summary of current recommendations for CF Bankshares and Unity Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CF Bankshares	0	1	2	0	2.67
Unity Bancorp	0	0	3	0	3.00

CF Bankshares presently has a consensus target price of $29.00, suggesting a potential upside of 22.21%. Unity Bancorp has a consensus target price of $62.00, suggesting a potential upside of 24.10%. Given Unity Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Unity Bancorp is more favorable than CF Bankshares.

Summary

Unity Bancorp beats CF Bankshares on 15 of the 17 factors compared between the two stocks.

About CF Bankshares

CF Bankshares Inc. operates as the bank holding company for CFBank, National Association that provides various banking products and services in the United States. The company accepts savings, retail and business checking accounts, and money market accounts, as well as certificates of deposit. It offers single-family mortgage loans; commercial real estate and multi-family residential mortgage loans; commercial loans and equipment leases; residential real estate loans and treasury management depository services; retail banking services and products. In addition, the company offers consumer loans, such as home equity lines of credit, home improvement loans, and loans secured by deposits and purchased loans, as well as other loans. Further, it provides online internet banking, mobile banking, and remote deposits. The company was formerly known as Central Federal Corporation and changed its name to CF Bankshares Inc. in July 2020. CF Bankshares Inc. was founded in 1892 and is based in Columbus, Ohio.

About Unity Bancorp

Unity Bancorp, Inc. operates as a bank holding company for Unity Bank that provides range of commercial and retail banking services to individuals, small and medium sized businesses, and professional communities. It offers personal and business checking accounts, time deposits, money market accounts, savings accounts, and retirement accounts, as well as noninterest and interest-bearing demand deposits. The company also provides small business administration loans; commercial loans; and residential mortgage and consumer loans, including residential real estate, home equity lines and loans, and residential construction lines, as well as personal loans. In addition, it offers credit and debit cards, wire transfer, safe deposit box, automated teller, and internet and mobile banking services; and automated clearing house origination and remote deposit capture services. Unity Bancorp, Inc. was incorporated in 1991 and is headquartered in Clinton, New Jersey.