Randolph Bancorp (NASDAQ:RNDB) and Unity Bancorp (NASDAQ:UNTY) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a summary of current recommendations and price targets for Randolph Bancorp and Unity Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Randolph Bancorp 1 0 0 0 1.00
Unity Bancorp 0 0 1 0 3.00

Unity Bancorp has a consensus target price of $29.50, suggesting a potential upside of 55.59%. Given Unity Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Unity Bancorp is more favorable than Randolph Bancorp.

Earnings and Valuation

This table compares Randolph Bancorp and Unity Bancorp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Randolph Bancorp $29.90 million 2.76 -$2.12 million N/A N/A
Unity Bancorp $63.58 million 3.21 $12.89 million N/A N/A

Unity Bancorp has higher revenue and earnings than Randolph Bancorp.

Dividends

Unity Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.5%. Randolph Bancorp does not pay a dividend. Unity Bancorp has increased its dividend for 5 consecutive years.

Risk & Volatility

Randolph Bancorp has a beta of 0.46, indicating that its stock price is 54% less volatile than the S&P 500. Comparatively, Unity Bancorp has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500.

Institutional & Insider Ownership

34.5% of Randolph Bancorp shares are held by institutional investors. Comparatively, 48.4% of Unity Bancorp shares are held by institutional investors. 7.7% of Randolph Bancorp shares are held by company insiders. Comparatively, 29.9% of Unity Bancorp 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 Randolph Bancorp and Unity Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Randolph Bancorp -11.21% -375.23% -53.70%
Unity Bancorp 25.38% 16.20% 1.37%

Summary

Unity Bancorp beats Randolph Bancorp on 14 of the 14 factors compared between the two stocks.

About Randolph Bancorp

Randolph Bancorp, Inc. operates as the bank holding company for Envision Bank that provides financial services to individuals, families, and small to mid-size businesses in Massachusetts, Rhode Island, and southern New Hampshire. The company accepts checking, NOW, money market, and savings accounts, as well as certificate of deposits and IRAs. It also offers one- to four-family residential mortgage, commercial real estate, commercial and industrial, construction, and consumer loans; home equity loans and lines of credit; and investment securities. In addition, the company provides remote deposit capture products for business customers to meet their online banking needs. As of February 27, 2018, it operated six retail branch locations and loan operations centers in Andover and North Attleboro, Massachusetts; and five loan production offices in eastern Massachusetts. The company was founded in 1851 and is based in Stoughton, Massachusetts. Randolph Bancorp, Inc. is a subsidiary of Randolph Bancorp (MHC).

About Unity Bancorp

Unity Bancorp, Inc. operates as a bank holding company for Unity Bank that provides a range of business and consumer financial 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 February 22, 2018, the company offered its financial services through 18 retail service centers 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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