Reviewing United Bancorporation of Alabama (OTCMKTS:UBAB) and Eagle Bancorp Montana (NASDAQ:EBMT)

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

Analyst Ratings

This is a summary of recent ratings for United Bancorporation of Alabama and Eagle Bancorp Montana, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Bancorporation of Alabama	0	0	0	0	N/A
Eagle Bancorp Montana	0	1	0	0	2.00

Eagle Bancorp Montana has a consensus target price of $13.50, suggesting a potential downside of 17.13%. Given Eagle Bancorp Montana’s higher possible upside, analysts clearly believe Eagle Bancorp Montana is more favorable than United Bancorporation of Alabama.

Risk and Volatility

United Bancorporation of Alabama has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500. Comparatively, Eagle Bancorp Montana has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
United Bancorporation of Alabama	31.02%	23.28%	2.18%
Eagle Bancorp Montana	7.03%	5.02%	0.41%

Valuation & Earnings

This table compares United Bancorporation of Alabama and Eagle Bancorp Montana”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Bancorporation of Alabama	$87.26 million	2.20	$31.54 million	$8.53	6.34
Eagle Bancorp Montana	$114.34 million	1.14	$10.06 million	$1.08	15.08

United Bancorporation of Alabama has higher earnings, but lower revenue than Eagle Bancorp Montana. United Bancorporation of Alabama is trading at a lower price-to-earnings ratio than Eagle Bancorp Montana, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

5.5% of United Bancorporation of Alabama shares are held by institutional investors. Comparatively, 35.7% of Eagle Bancorp Montana shares are held by institutional investors. 6.7% of Eagle Bancorp Montana shares are held by 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.

Dividends

United Bancorporation of Alabama pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. Eagle Bancorp Montana pays an annual dividend of $0.57 per share and has a dividend yield of 3.5%. United Bancorporation of Alabama pays out 11.7% of its earnings in the form of a dividend. Eagle Bancorp Montana pays out 52.8% 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. Eagle Bancorp Montana has increased its dividend for 14 consecutive years. Eagle Bancorp Montana is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Eagle Bancorp Montana beats United Bancorporation of Alabama on 8 of the 15 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 Eagle Bancorp Montana

Eagle Bancorp Montana, Inc. operates as the bank holding company for Opportunity Bank of Montana that provides various retail banking products and services to small businesses and individuals in Montana. It accepts various deposit products, such as checking, savings, money market, and individual retirement accounts, as well as certificates of deposit accounts. The company also provides 1-4 family residential mortgage loans, such as residential mortgages and construction of residential properties; commercial real estate loans, including multi-family dwellings, nonresidential property, commercial construction and development, and farmland loans; and second mortgage/home equity loans. In addition, it offers consumer loans, such as loans secured by collateral other than real estate, such as automobiles, recreational vehicles, and boats; personal loans and lines of credit; commercial business loans consisting of business loans and lines of credit on a secured and unsecured basis; construction loans; agricultural loans; and mortgage loan services. The company operates full-service branches and automated teller machines. Eagle Bancorp Montana, Inc. was founded in 1922 and is headquartered in Helena, Montana.