Financial Contrast: HBT Financial (NASDAQ:HBT) versus First United (NASDAQ:FUNC)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
HBT Financial	26.64%	13.81%	1.57%
First United	21.02%	13.24%	1.25%

Dividends

HBT Financial pays an annual dividend of $0.84 per share and has a dividend yield of 3.4%. First United pays an annual dividend of $1.04 per share and has a dividend yield of 2.7%. HBT Financial pays out 33.9% of its earnings in the form of a dividend. First United pays out 27.2% 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. HBT Financial has raised its dividend for 5 consecutive years and First United has raised its dividend for 6 consecutive years.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HBT Financial	$287.27 million	2.73	$71.78 million	$2.48	10.06
First United	$86.17 million	2.92	$20.57 million	$3.83	10.12

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

Risk and Volatility

HBT Financial has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, First United has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500.

Institutional & Insider Ownership

78.6% of HBT Financial shares are owned by institutional investors. Comparatively, 33.3% of First United shares are owned by institutional investors. 59.7% of HBT Financial shares are owned by company insiders. Comparatively, 7.9% of First United shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for HBT Financial and First United, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HBT Financial	0	4	3	0	2.43
First United	0	0	2	0	3.00

HBT Financial currently has a consensus target price of $28.50, indicating a potential upside of 14.27%. First United has a consensus target price of $42.00, indicating a potential upside of 8.36%. Given HBT Financial’s higher probable upside, equities analysts clearly believe HBT Financial is more favorable than First United.

Summary

HBT Financial beats First United on 11 of the 17 factors compared between the two stocks.

About HBT Financial

HBT Financial, Inc. operates as the bank holding company for Heartland Bank and Trust Company that provides business, commercial, and retail banking products and services to individuals, businesses, and municipal entities in Central and Northeastern Illinois, and Eastern Iowa. The company's deposits accounts consist of noninterest-bearing demand deposits, interest-bearing transaction accounts, money market accounts, savings accounts, certificates of deposits, health savings accounts, and individual retirement accounts. Its loan offering comprises owner and non-owner occupied commercial real estate; construction and land development and multi-family; commercial and industrial; agricultural and farmland; and one-to-four family residential loans, as well as municipal, consumer, and other loans. The company also offers wealth management services, including financial planning to consumers, trusts, and estates; trustee and custodial; investment management; corporate retirement plan consulting and administration; and retail brokerage services. In addition, it provides farmland management, and farmland sales and services; commercial checking accounts; and treasury management services, as well as originates and sells residential mortgage loans. Further, the company offers digital banking services, such as online and mobile banking, and digital payment services, as well as personal financial management tools. The company was formerly known as Heartland Bancorp, Inc. and changed its name to HBT Financial, Inc. in September 2019. HBT Financial, Inc. was founded in 1920 and is headquartered in Bloomington, Illinois.

About First United

First United Corporation operates as the bank holding company for First United Bank & Trust that provides various retail and commercial banking services to businesses and individuals. It offers various deposit products, which includes checking, savings, money market deposit, and regular and individual retirement accounts (IRAs), as well as certificates of deposit. The company loan portfolio includes commercial loans secured by real estate, commercial equipment, vehicles, or other assets of the borrower; commercial real estate loans for residential and commercial development, agricultural purpose properties, and service industry buildings, such as restaurants and motels, retail buildings, and general purpose business space; residential mortgage loans; home equity lines of credit; residential real estate construction loans; and indirect and direct auto loans, student loans, and other secured and unsecured lines of credit and term loans. It also offers access to multi-million-dollar certificates of deposit and the Intrafi cash service, including multi-million-dollar savings and demand deposits to municipalities, businesses, and consumers; and treasury management, cash sweep, and various checking services. In addition, the company provides trust services, which includes personal trust, investment agency accounts, charitable trusts, retirement accounts, including IRA roll-overs, 401(k) accounts and defined benefit plans, estate administration, and estate planning; and insurance products, brokerage services, and safe deposit and night depository facilities. First United Corporation was founded in 1900 and is headquartered in Oakland, Maryland.