Univest Corporation of Pennsylvania (NASDAQ: UVSP) and First Business Financial Services (NASDAQ:FBIZ) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, risk, institutional ownership and dividends.

Institutional and Insider Ownership

61.7% of Univest Corporation of Pennsylvania shares are held by institutional investors. Comparatively, 60.1% of First Business Financial Services shares are held by institutional investors. 3.6% of Univest Corporation of Pennsylvania shares are held by company insiders. Comparatively, 6.6% of First Business Financial Services shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Univest Corporation of Pennsylvania and First Business Financial Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Univest Corporation of Pennsylvania 13.95% 8.04% 0.96%
First Business Financial Services 12.64% 7.25% 0.66%

Dividends

Univest Corporation of Pennsylvania pays an annual dividend of $0.80 per share and has a dividend yield of 2.5%. First Business Financial Services pays an annual dividend of $0.52 per share and has a dividend yield of 2.3%. Univest Corporation of Pennsylvania pays out 72.1% of its earnings in the form of a dividend. First Business Financial Services pays out 38.2% 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.

Analyst Ratings

This is a summary of recent ratings and price targets for Univest Corporation of Pennsylvania and First Business Financial Services, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Univest Corporation of Pennsylvania 0 1 1 0 2.50
First Business Financial Services 0 3 0 0 2.00

Univest Corporation of Pennsylvania currently has a consensus target price of $33.00, indicating a potential upside of 2.48%. First Business Financial Services has a consensus target price of $24.50, indicating a potential upside of 6.61%. Given First Business Financial Services’ higher probable upside, analysts plainly believe First Business Financial Services is more favorable than Univest Corporation of Pennsylvania.

Earnings & Valuation

This table compares Univest Corporation of Pennsylvania and First Business Financial Services’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Univest Corporation of Pennsylvania $185.52 million 4.63 $29.60 million $1.11 29.01
First Business Financial Services $66.32 million 3.02 $11.85 million $1.36 16.90

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

Volatility & Risk

Univest Corporation of Pennsylvania has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500. Comparatively, First Business Financial Services has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500.

Summary

Univest Corporation of Pennsylvania beats First Business Financial Services on 11 of the 16 factors compared between the two stocks.

About Univest Corporation of Pennsylvania

Univest Corporation of Pennsylvania is the bank holding company of Univest Bank and Trust Co. (the Bank). The Bank is a Pennsylvania state-chartered bank and trust company. The Company’s business segments include Banking, Wealth Management and Insurance. The Banking segment provides financial services, such as deposit taking, loan origination and servicing, mortgage banking, other general banking services and equipment lease financing. The Wealth Management segment offers trust and investment advisory services, guardian and custodian of employee benefits and other trust and brokerage services, as well as a registered investment advisory managing private investment accounts for both individuals and institutions. The Insurance segment includes a full-service insurance brokerage agency offering commercial property and casualty insurance, group life and health coverage, employee benefit solutions, personal insurance lines and human resources consulting.

About First Business Financial Services

First Business Financial Services, Inc. (FBFS) is a bank holding company. The Company engages in the commercial banking business through its bank subsidiaries, which include First Business Bank (FBB), First Business Bank-Milwaukee (FBB-Milwaukee) and Alterra Bank (Alterra) (FBB and FBB-Milwaukee and, together with FBB, the Banks). The operations of FBFS are conducted through the Banks and certain subsidiaries of FBB. The Banks operate as business banks focusing on delivering a line of commercial banking products, including commercial loans and commercial real estate loans, and services to meet the needs of small- and medium-sized businesses, business owners, executives, professionals and high net worth individuals. Its business lines include commercial lending, asset-based financing, equipment financing, small business administration (SBA) lending, treasury management services, and trust and investment services. Its investments include short-term investments and securities.

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