First Busey (NASDAQ:BUSE) and University Bancorp (OTCMKTS:UNIB) Critical Review

First Busey (NASDAQ:BUSE) and University Bancorp (OTCMKTS:UNIB) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, earnings, profitability, dividends, valuation and analyst recommendations.

Insider and Institutional Ownership

46.1% of First Busey shares are held by institutional investors. Comparatively, 1.1% of University Bancorp shares are held by institutional investors. 7.5% of First Busey shares are held by insiders. Comparatively, 63.7% of University Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
First Busey 22.18% 8.62% 1.04%
University Bancorp N/A N/A N/A

Earnings & Valuation

This table compares First Busey and University Bancorp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Busey $472.65 million 2.93 $102.95 million $2.15 11.83
University Bancorp N/A N/A N/A N/A N/A

First Busey has higher revenue and earnings than University Bancorp.

Analyst Ratings

This is a summary of current recommendations and price targets for First Busey and University Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Busey 0 1 1 0 2.50
University Bancorp 0 0 0 0 N/A

First Busey currently has a consensus target price of $29.00, suggesting a potential upside of 13.99%. Given First Busey’s higher possible upside, equities research analysts plainly believe First Busey is more favorable than University Bancorp.

Dividends

First Busey pays an annual dividend of $0.92 per share and has a dividend yield of 3.6%. University Bancorp pays an annual dividend of $0.30 per share and has a dividend yield of 2.1%. First Busey pays out 42.8% of its earnings in the form of a dividend. First Busey has increased its dividend for 1 consecutive years. First Busey is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

First Busey has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, University Bancorp has a beta of 0.37, indicating that its share price is 63% less volatile than the S&P 500.

Summary

First Busey beats University Bancorp on 10 of the 12 factors compared between the two stocks.

About First Busey

First Busey Corporation operates as the bank holding company for Busey Bank that provides retail and commercial banking products and services to individual, corporate, institutional, and governmental customers in the United States. The company operates in three segments: Banking, Remittance Processing, and Wealth Management. It offers customary types of demand and savings deposits; and commercial, agricultural, real estate construction, commercial and residential real estate, and consumer loans, as well as home equity lines of credit. The company also provides money transfer, safe deposit, IRA, and other fiduciary services through banking center, ATM and technology-based networks. In addition, it offers investment management, trust, estate advisory, and financial planning services, as well as business succession planning, and employee retirement planning services; investment strategy consulting and fiduciary services; and security brokerage services. Further, the company provides pay processing solutions, such as walk-in payment processing for payments delivered by customers to retail pay agents; online bill payment solutions for payments made by customers on a billing company's Website; customer service payments for payments accepted over the telephone; mobile bill pay; direct debit services; electronic concentration of payments delivered by the automated clearing house network; money management software and credit card networks; and lockbox remittance processing of payments delivered by mail. It has 61 banking centers in Illinois; 13 in Missouri; five in southwest Florida; and one in Indianapolis, Indiana. The company was founded in 1868 and is headquartered in Champaign, Illinois.

About University Bancorp

University Bancorp, Inc. operates as the holding company for University Bank that provides various personal, business, and community banking services in the United States. It accepts various checking, savings, and deposit accounts. The company's consumer loans include home equity installment, auto, personal, and recreational vehicle loans, as well as home equity lines of credits; and commercial and small business loans comprise commercial real estate, equipment, small business, and non-profit loans, as well as working capital lines of credit. In addition, the company offers online cash management, and online banking and bill pay services; online reorder checks; wire transfer; courier; and insurance products, as well as ATM services. University Bancorp, Inc. was founded in 1890 and is based in Ann Arbor, Michigan.

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