United Bancorporation of Alabama (OTCMKTS:UBAB) & Stock Yards Bancorp (NASDAQ:SYBT) Critical Survey

United Bancorporation of Alabama (OTCMKTS:UBAB) and Stock Yards Bancorp (NASDAQ:SYBT) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.

Dividends

United Bancorporation of Alabama pays an annual dividend of $1.42 per share and has a dividend yield of 2.3%. Stock Yards Bancorp pays an annual dividend of $1.32 per share and has a dividend yield of 1.7%. United Bancorporation of Alabama pays out 23.1% of its earnings in the form of a dividend. Stock Yards Bancorp pays out 26.3% 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. Stock Yards Bancorp has raised its dividend for 15 consecutive years. United Bancorporation of Alabama is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

United Bancorporation of Alabama has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500. Comparatively, Stock Yards Bancorp has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for United Bancorporation of Alabama and Stock Yards Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Bancorporation of Alabama	0	1	0	0	2.00
Stock Yards Bancorp	0	6	1	0	2.14

Stock Yards Bancorp has a consensus target price of $88.00, indicating a potential upside of 11.65%. Given Stock Yards Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Stock Yards Bancorp is more favorable than United Bancorporation of Alabama.

Valuation and Earnings

This table compares United Bancorporation of Alabama and Stock Yards Bancorp”s gross 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	2.06	$19.67 million	$6.15	9.85
Stock Yards Bancorp	$564.54 million	4.34	$140.15 million	$5.02	15.70

Stock Yards 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 Stock Yards Bancorp, indicating that it is currently the more affordable of the two stocks.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
United Bancorporation of Alabama	23.54%	14.40%	1.49%
Stock Yards Bancorp	25.41%	13.39%	1.55%

Insider and Institutional Ownership

5.5% of United Bancorporation of Alabama shares are owned by institutional investors. Comparatively, 56.5% of Stock Yards Bancorp shares are owned by institutional investors. 2.9% of Stock Yards Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Stock Yards Bancorp beats United Bancorporation of Alabama on 13 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 Stock Yards Bancorp

Stock Yards Bancorp, Inc. operates as a holding company for Stock Yards Bank & Trust Company that provides various financial services for individuals, corporations, and others in the United States. It operates in two segments, Commercial Banking, and WM&T. The Commercial Banking segment offers a range of loan and deposit products to individual consumers and businesses in all its markets through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, commercial real estate lending, leasing, treasury management services, merchant services, international banking, correspondent banking, and other banking services. This segment also provides securities brokerage services through an arrangement with a third party broker-dealer. The WM&T segment provides investment management, financial and retirement planning, and trust and estate services, as well as retirement plan management for businesses and corporations. It provides services in Louisville, central, eastern, and northern Kentucky, as well as Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets. The company was founded in 1904 and is headquartered in Louisville, Kentucky.