University Bancorp (OTCMKTS:UNIB) versus ServisFirst Bancshares (NYSE:SFBS) Critical Review

ServisFirst Bancshares (NYSE:SFBS) and University Bancorp (OTCMKTS:UNIB) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, risk, dividends, analyst recommendations, institutional ownership and earnings.

Profitability

This table compares ServisFirst Bancshares and University Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ServisFirst Bancshares	21.16%	14.23%	1.33%
University Bancorp	N/A	N/A	N/A

Insider & Institutional Ownership

67.3% of ServisFirst Bancshares shares are held by institutional investors. 7.4% of ServisFirst Bancshares shares are held by insiders. Comparatively, 63.7% of University Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares ServisFirst Bancshares and University Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ServisFirst Bancshares	$843.66 million	6.15	$206.85 million	$3.74	25.44
University Bancorp	$105.57 million	0.82	$5.43 million	N/A	N/A

ServisFirst Bancshares has higher revenue and earnings than University Bancorp.

Analyst Recommendations

This is a breakdown of current ratings and target prices for ServisFirst Bancshares and University Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ServisFirst Bancshares	0	2	0	0	2.00
University Bancorp	0	0	0	0	0.00

ServisFirst Bancshares presently has a consensus target price of $85.00, suggesting a potential downside of 10.68%. Given ServisFirst Bancshares’ stronger consensus rating and higher probable upside, equities research analysts plainly believe ServisFirst Bancshares is more favorable than University Bancorp.

Volatility and Risk

ServisFirst Bancshares has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, University Bancorp has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500.

Summary

ServisFirst Bancshares beats University Bancorp on 10 of the 11 factors compared between the two stocks.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.

About University Bancorp

University Bancorp, Inc. operates as the bank holding company for University Bank that provides various personal, business, and community banking services in the United States. It offers checking, NOW, savings, money market, time deposit, and certificates of deposit accounts. The company's consumer loans include home equity, short term, automobile, personal, and recreational vehicle loans, as well as home equity lines of credits; SBA, commercial real estate, equipment, home improvement, and other instalment loans; and non-profit loans, as well as working capital lines of credit. In addition, the company provides foreign currency exchange; reverse mortgage; online banking and bill pay; online reorder checks; wire transfer; and courier services, as well as credit card and ATM services. Further, it offers life, health, property, and casualty insurance products, as well as investment products, including annuities. University Bancorp, Inc. was founded in 1890 and is based in Ann Arbor, Michigan.