Head to Head Analysis: German American Bancorp (NASDAQ:GABC) & United Bancorporation of Alabama (OTCMKTS:UBAB)

United Bancorporation of Alabama (OTCMKTS:UBAB) and German American Bancorp (NASDAQ:GABC) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, institutional ownership, analyst recommendations and profitability.

Earnings & Valuation

This table compares United Bancorporation of Alabama and German American Bancorp’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Bancorporation of Alabama	$87.26 million	1.93	$31.54 million	$8.71	5.46
German American Bancorp	$247.53 million	4.10	$85.89 million	$2.85	11.99

German American 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 German American Bancorp, indicating that it is currently the more affordable of the two stocks.

Dividends

United Bancorporation of Alabama pays an annual dividend of $0.70 per share and has a dividend yield of 1.5%. German American Bancorp pays an annual dividend of $1.08 per share and has a dividend yield of 3.2%. United Bancorporation of Alabama pays out 8.0% of its earnings in the form of a dividend. German American Bancorp pays out 37.9% 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. German American Bancorp has increased its dividend for 12 consecutive years. German American Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
United Bancorporation of Alabama	34.65%	27.14%	2.26%
German American Bancorp	25.83%	13.68%	1.38%

Volatility & Risk

United Bancorporation of Alabama has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500. Comparatively, German American Bancorp has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500.

Institutional & Insider Ownership

5.5% of United Bancorporation of Alabama shares are held by institutional investors. Comparatively, 46.9% of German American Bancorp shares are held by institutional investors. 4.6% of German American Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and target prices for United Bancorporation of Alabama and German American Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Bancorporation of Alabama	0	0	0	0	N/A
German American Bancorp	0	2	1	0	2.33

German American Bancorp has a consensus price target of $36.33, indicating a potential upside of 6.33%. Given German American Bancorp’s higher probable upside, analysts clearly believe German American Bancorp is more favorable than United Bancorporation of Alabama.

Summary

German American Bancorp beats United Bancorporation of Alabama on 11 of the 16 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 German American Bancorp

German American Bancorp, Inc. operates as a financial holding company for German American Bank that provides retail and commercial banking services. The company operates through three segments: Core Banking, Wealth Management Services, and Insurance Operations. The Core Banking segment accepts deposits from the general public; and originates consumer, commercial and agricultural, commercial and agricultural real estate, and residential mortgage loans, as well as sells residential mortgage loans in the secondary market. The Wealth Management segment provides trust, investment advisory, brokerage, and retirement planning services. The Insurance Operations segment offers a range of personal and corporate property and casualty insurance products. It also offers checking, saving, and individual retirement accounts; certificates of deposit; wire transfer; credit cards; home equity, mortgages, and small business; treasury management; and online and mobile banking, bill pay, digital wallet, mobile check deposit, credit score and report, money management, and estatements, as well as wealth advisory. German American Bancorp, Inc. was founded in 1910 and is based in Jasper, Indiana.