Financial Analysis: Unity Bancorp (UNTY) and Its Peers

Unity Bancorp (NASDAQ: UNTY) is one of 265 public companies in the “State commercial banks” industry, but how does it compare to its rivals? We will compare Unity Bancorp to similar companies based on the strength of its analyst recommendations, dividends, institutional ownership, profitability, valuation, earnings and risk.

Dividends

Unity Bancorp pays an annual dividend of $0.32 per share and has a dividend yield of 1.5%. Unity Bancorp pays out 15.9% of its earnings in the form of a dividend. As a group, “State commercial banks” companies pay a dividend yield of 2.4% and pay out 30.3% of their earnings in the form of a dividend. Unity Bancorp has increased its dividend for 5 consecutive years.

Risk & Volatility

Unity Bancorp has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500. Comparatively, Unity Bancorp’s rivals have a beta of 0.75, indicating that their average share price is 25% less volatile than the S&P 500.

Institutional & Insider Ownership

48.7% of Unity Bancorp shares are held by institutional investors. Comparatively, 47.9% of shares of all “State commercial banks” companies are held by institutional investors. 29.7% of Unity Bancorp shares are held by company insiders. Comparatively, 11.0% of shares of all “State commercial banks” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Unity Bancorp and its rivals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Unity Bancorp 0 0 2 0 3.00
Unity Bancorp Competitors 2603 7334 5412 326 2.22

Unity Bancorp presently has a consensus price target of $26.75, indicating a potential upside of 21.59%. As a group, “State commercial banks” companies have a potential upside of 18.10%. Given Unity Bancorp’s stronger consensus rating and higher probable upside, equities analysts plainly believe Unity Bancorp is more favorable than its rivals.

Profitability

This table compares Unity Bancorp and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Unity Bancorp 28.43% 16.51% 1.44%
Unity Bancorp Competitors 22.70% 10.89% 1.20%

Earnings and Valuation

This table compares Unity Bancorp and its rivals top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Unity Bancorp $76.29 million $21.92 million 10.95
Unity Bancorp Competitors $1.45 billion $275.37 million 8.28

Unity Bancorp’s rivals have higher revenue and earnings than Unity Bancorp. Unity Bancorp is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Summary

Unity Bancorp beats its rivals on 10 of the 15 factors compared.

Unity Bancorp Company Profile

Unity Bancorp, Inc. operates as the holding company for Unity Bank that provides a range of banking products and services to individuals, small and medium sized businesses, and professional communities. The company offers personal and business checking accounts, time deposits, money market accounts, and regular savings accounts. It also provides commercial, small business administration, consumer, mortgage, home equity, and personal loans. As of December 31, 2018, the company offered its financial services through 19 branch offices located in Bergen, Hunterdon, Middlesex, Somerset, Union, and Warren Counties in New Jersey, as well as Northampton County, Pennsylvania. Unity Bancorp, Inc. was founded in 1991 and is headquartered in Clinton, New Jersey.

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