Comparing Union Bankshares (NASDAQ:UNB) and QNB (OTCMKTS:QNBC)

Union Bankshares (NASDAQ:UNB) and QNB (OTCMKTS:QNBC) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Dividends

Union Bankshares pays an annual dividend of $1.44 per share and has a dividend yield of 6.1%. QNB pays an annual dividend of $1.56 per share and has a dividend yield of 3.5%. Union Bankshares pays out 56.9% of its earnings in the form of a dividend. QNB pays out 40.9% 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.

Earnings & Valuation

This table compares Union Bankshares and QNB”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Union Bankshares	$54.23 million	2.00	$11.08 million	$2.53	9.28
QNB	$99.60 million	2.20	$14.09 million	$3.81	11.55

QNB has higher revenue and earnings than Union Bankshares. Union Bankshares is trading at a lower price-to-earnings ratio than QNB, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Union Bankshares has a beta of 0.33, meaning that its share price is 67% less volatile than the S&P 500. Comparatively, QNB has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500.

Profitability

This table compares Union Bankshares and QNB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Union Bankshares	13.13%	14.94%	0.74%
QNB	14.26%	17.60%	1.13%

Institutional and Insider Ownership

14.8% of Union Bankshares shares are held by institutional investors. Comparatively, 0.7% of QNB shares are held by institutional investors. 2.1% of Union Bankshares shares are held by company insiders. Comparatively, 14.5% of QNB shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and price targets for Union Bankshares and QNB, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Union Bankshares	0	1	0	0	2.00
QNB	0	0	0	0	0.00

Summary

QNB beats Union Bankshares on 11 of the 14 factors compared between the two stocks.

About Union Bankshares

Union Bankshares, Inc. operates as the bank holding company for Union Bank that provides retail, commercial, and municipal banking products and services in northern Vermont and New Hampshire. It offers retail depository services, such as personal checking, savings, money market, IRA/SEP/KEOGH, and health savings accounts, as well as certificates of deposit. The company also provides commercial real estate loans; commercial loans for plant and equipment, working capital, real estate renovation, and other business purposes to business owners and investors; small business administration guaranteed loans; residential construction and mortgage loans; municipal financing, including loans and excess deposits secured by FHLBB letters of credit; and home improvement loans and overdraft checking privileges against preauthorized lines of credit. In addition, it offers online cash management services, including account reconciliation, credit card depository, automated clearing house origination, wire transfers, positive pay and night depository services; merchant credit card services for the deposit and immediate credit of sales drafts; remote deposit capture services; and online mortgage application and consumer deposit account opening services. Further, the company provides business checking accounts; standby letters of credit, bank checks or money orders, and safe deposit boxes; ATM cards and services; debit cards; telephone, internet, and mobile banking services, including bill pay; and wealth management, fiduciary, and trust services. It offers retail banking services to individuals; and commercial banking services to small and medium sized business corporations, limited liability companies, partnerships, and sole proprietorships, as well as nonprofit organizations, local municipalities, and school districts. Union Bankshares, Inc. was founded in 1891 and is headquartered in Morrisville, Vermont.

About QNB

QNB Corp. operates as the bank holding company for QNB Bank that engages in the provision of commercial and retail banking products, and retail brokerage services. It offers various deposit products, which include demand and savings accounts, such as money market, interest-bearing demand, club, traditional statement savings, and online savings accounts; and time deposits comprising certificates of deposit and individual retirement accounts. The company also provides commercial and industrial loans, commercial and residential real estate loans, construction and land development loans, indirect lease financing, 1-4 family residential mortgage loans, home equity loans and lines of credit, and consumer loans. In addition, it offers retail brokerage and advisory services; credit cards and insurance products; merchant services; ATM and debit card services; and internet and mobile-banking, electronic bill pay, and remote deposit capture services. The company serves other community banks, thrift institutions, credit unions and other non-bank financial organizations, such as mutual fund companies, insurance companies, and brokerage companies. QNB Corp. was founded in 1877 and is based in Quakertown, Pennsylvania.