Head-To-Head Survey: Community Trust Bancorp (NASDAQ:CTBI) & United Bancorporation of Alabama (OTCMKTS:UBAB)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
United Bancorporation of Alabama	21.11%	12.60%	1.34%
Community Trust Bancorp	23.95%	11.96%	1.51%

Valuation & Earnings

This table compares United Bancorporation of Alabama and Community Trust Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Bancorporation of Alabama	$89.83 million	1.72	$19.67 million	$5.22	9.72
Community Trust Bancorp	$409.34 million	2.66	$98.06 million	$5.43	11.03

Community Trust 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 Community Trust Bancorp, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

5.5% of United Bancorporation of Alabama shares are owned by institutional investors. Comparatively, 60.2% of Community Trust Bancorp shares are owned by institutional investors. 2.6% of Community Trust Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

United Bancorporation of Alabama has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500. Comparatively, Community Trust Bancorp has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500.

Dividends

United Bancorporation of Alabama pays an annual dividend of $1.40 per share and has a dividend yield of 2.8%. Community Trust Bancorp pays an annual dividend of $2.12 per share and has a dividend yield of 3.5%. United Bancorporation of Alabama pays out 26.8% of its earnings in the form of a dividend. Community Trust Bancorp pays out 39.0% 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. Community Trust Bancorp has raised its dividend for 44 consecutive years. Community Trust Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and price targets for United Bancorporation of Alabama and Community Trust Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Bancorporation of Alabama	0	1	0	0	2.00
Community Trust Bancorp	0	0	3	0	3.00

Community Trust Bancorp has a consensus price target of $63.50, indicating a potential upside of 5.97%. Given Community Trust Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Community Trust Bancorp is more favorable than United Bancorporation of Alabama.

Summary

Community Trust Bancorp beats United Bancorporation of Alabama on 15 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 Community Trust Bancorp

Community Trust Bancorp, Inc. operates as the bank holding company for Community Trust Bank, Inc. that engages in the provision of commercial and personal banking, and trust and wealth management services to small and mid-sized communities in eastern, northeastern, central, and south-central Kentucky, as well as southern West Virginia, and northeastern Tennessee. The company accepts time and demand deposits, checking accounts, savings accounts and savings certificates, individual retirement accounts and Keogh plans, and money market accounts. Its loan portfolio includes commercial, construction, mortgage, and personal loans; lease-financing, lines of credit, revolving lines of credit, and term loans, as well as other specialized loans, including asset-based financing; residential and commercial real estate loans; and consumer loans. The company also provides cash management, renting safe deposit boxes, and funds transfer services; issues letters of credit; and acts as a trustee of personal trusts, executor of estates, trustee for employee benefit trusts, and paying agent for bond and stock issues, as well as an investment agent and depositor for securities. In addition, it offers securities brokerage services; debit cards; annuity and life insurance products; and repurchase agreements, as well as mobile, internet banking, and e-statement services. The company was founded in 1903 and is headquartered in Pikeville, Kentucky.