United Community Financial Corp. (NASDAQ: UCFC) and Brookline Bancorp (NASDAQ:BRKL) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, institutional ownership, risk and profitability.

Insider and Institutional Ownership

58.8% of United Community Financial Corp. shares are held by institutional investors. Comparatively, 71.4% of Brookline Bancorp shares are held by institutional investors. 3.6% of United Community Financial Corp. shares are held by company insiders. Comparatively, 2.9% of Brookline Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for United Community Financial Corp. and Brookline Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Community Financial Corp. 1 0 2 0 2.33
Brookline Bancorp 0 2 1 0 2.33

United Community Financial Corp. currently has a consensus price target of $10.50, suggesting a potential upside of 16.28%. Brookline Bancorp has a consensus price target of $15.75, suggesting a potential upside of 11.31%. Given United Community Financial Corp.’s higher possible upside, equities research analysts clearly believe United Community Financial Corp. is more favorable than Brookline Bancorp.

Volatility and Risk

United Community Financial Corp. has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500. Comparatively, Brookline Bancorp has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500.

Dividends

United Community Financial Corp. pays an annual dividend of $0.16 per share and has a dividend yield of 1.8%. Brookline Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 2.5%. United Community Financial Corp. pays out 39.0% of its earnings in the form of a dividend. Brookline Bancorp pays out 46.8% 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.

Valuation & Earnings

This table compares United Community Financial Corp. and Brookline Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
United Community Financial Corp. $91.25 million 4.92 $20.38 million $0.41 22.02
Brookline Bancorp $224.41 million 4.83 $58.99 million $0.77 18.38

Brookline Bancorp has higher revenue and earnings than United Community Financial Corp.. Brookline Bancorp is trading at a lower price-to-earnings ratio than United Community Financial Corp., indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares United Community Financial Corp. and Brookline Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
United Community Financial Corp. 18.95% 8.90% 1.00%
Brookline Bancorp 19.64% 7.56% 0.85%

Summary

United Community Financial Corp. beats Brookline Bancorp on 8 of the 15 factors compared between the two stocks.

United Community Financial Corp. Company Profile

United Community Financial Corp. is financial services holding company. The Company’s subsidiaries include The Home Savings and Loan Company of Youngstown, Ohio (Home Savings or the Bank), HSB Insurance, LLC and HSB Capital, LLC. The principal business of Home Savings is the origination of mortgage loans, including construction loans, on residential and nonresidential real estate located in Home Savings’ primary market area. In addition to real estate lending, Home Savings originates commercial loans and various types of consumer loans. Funds for lending and other investment activities are obtained primarily from retail deposits. HSB Insurance, LLC is an insurance agency that offers a range of insurance products for business and residential customers, which include, auto, homeowners, life-health, commercial, surety bonds and aviation. HSB Capital, LLC provides mezzanine funding for customers. Mezzanine loans are offered to customers in United Community’s market area.

Brookline Bancorp Company Profile

Brookline Bancorp, Inc. operates as a multi-bank holding company for Brookline Bank and its subsidiaries; Bank Rhode Island (BankRI) and its subsidiaries; First Ipswich Bank (First Ipswich) and its subsidiaries, and Brookline Securities Corp. As a commercially focused financial institution with 50 full-service banking offices throughout greater Boston, the north shore of Massachusetts and Rhode Island, the Company, through Brookline Bank, BankRI and First Ipswich (individually and collectively the Banks), offered a range of commercial, business and retail banking services, including cash management products, online banking services, consumer and residential loans and investment services throughout central New England, as of December 31, 2016. The Company also provides specialty equipment financing through its subsidiaries, Eastern Funding LLC and Macrolease Corporation.

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