Analyzing United Security Bancshares (NASDAQ:UBFO) and CPB (NYSE:CPF)

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

Insider and Institutional Ownership

30.9% of United Security Bancshares shares are held by institutional investors. Comparatively, 88.4% of CPB shares are held by institutional investors. 22.1% of United Security Bancshares shares are held by company insiders. Comparatively, 1.7% of CPB shares are held by company 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 United Security Bancshares and CPB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Security Bancshares	18.65%	9.11%	1.01%
CPB	21.17%	13.64%	1.06%

Analyst Ratings

This is a breakdown of current ratings for United Security Bancshares and CPB, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Security Bancshares	0	0	1	0	3.00
CPB	0	1	2	0	2.67

CPB has a consensus price target of $35.50, suggesting a potential upside of 12.76%. Given CPB’s higher possible upside, analysts clearly believe CPB is more favorable than United Security Bancshares.

Volatility and Risk

United Security Bancshares has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500. Comparatively, CPB has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500.

Valuation & Earnings

This table compares United Security Bancshares and CPB”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Security Bancshares	$65.90 million	2.73	$12.29 million	$0.71	14.38
CPB	$288.56 million	2.88	$77.48 million	$2.86	11.01

CPB has higher revenue and earnings than United Security Bancshares. CPB 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

United Security Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 4.7%. CPB pays an annual dividend of $1.16 per share and has a dividend yield of 3.7%. United Security Bancshares pays out 67.6% of its earnings in the form of a dividend. CPB pays out 40.6% 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 Security Bancshares has increased its dividend for 2 consecutive years and CPB has increased its dividend for 1 consecutive years. United Security Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

CPB beats United Security Bancshares on 12 of the 17 factors compared between the two stocks.

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.

About CPB

Central Pacific Financial Corp. operates as the bank holding company for Central Pacific Bank that provides a range of commercial banking products and services to businesses, professionals, and individuals in the United States. It offers various deposit products and services, including checking, savings and time deposits, cash management and digital banking, trust, and retail brokerage services, as well as money market accounts and certificates of deposit. The company also provides various lending activities, such as commercial, commercial and residential mortgage, home equity, and consumer loans; and other products and services comprising debit cards, internet and mobile banking, cash management services, full-service ATMs, safe deposit boxes, international banking services, night depository facilities, foreign exchange, and wire transfers. In addition, it offers wealth management products and services that include non-deposit investment products, annuities, insurance, investment management, asset custody and general consultation, and planning services. The company was founded in 1954 and is headquartered in Honolulu, Hawaii.