Unity Bancorp (NASDAQ:UNTY) versus F.N.B. (NYSE:FNB) Critical Survey

F.N.B. (NYSE:FNB) and Unity Bancorp (NASDAQ:UNTY) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, earnings, analyst recommendations, valuation and risk.

Institutional and Insider Ownership

79.2% of F.N.B. shares are held by institutional investors. Comparatively, 42.3% of Unity Bancorp shares are held by institutional investors. 1.5% of F.N.B. shares are held by insiders. Comparatively, 28.9% of Unity Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

F.N.B. pays an annual dividend of $0.52 per share and has a dividend yield of 2.8%. Unity Bancorp pays an annual dividend of $0.68 per share and has a dividend yield of 1.2%. F.N.B. pays out 30.6% of its earnings in the form of a dividend. Unity Bancorp pays out 11.3% 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. Unity Bancorp has raised its dividend for 12 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for F.N.B. and Unity Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
F.N.B.	0	2	5	0	2.71
Unity Bancorp	0	0	4	2	3.33

F.N.B. presently has a consensus price target of $20.29, suggesting a potential upside of 10.80%. Unity Bancorp has a consensus price target of $65.50, suggesting a potential upside of 12.74%. Given Unity Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Unity Bancorp is more favorable than F.N.B..

Risk and Volatility

F.N.B. has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Unity Bancorp has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500.

Earnings & Valuation

This table compares F.N.B. and Unity Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
F.N.B.	$1.84 billion	3.51	$565.00 million	$1.70	10.77
Unity Bancorp	$188.41 million	3.10	$57.95 million	$6.04	9.62

F.N.B. has higher revenue and earnings than Unity Bancorp. Unity Bancorp is trading at a lower price-to-earnings ratio than F.N.B., indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares F.N.B. and Unity Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
F.N.B.	22.46%	9.12%	1.22%
Unity Bancorp	31.00%	16.34%	1.91%

Summary

Unity Bancorp beats F.N.B. on 10 of the 18 factors compared between the two stocks.

About F.N.B.

F.N.B. Corporation, a bank and financial holding company, provides a range of financial products and services primarily to consumers, corporations, governments, and small- to medium-sized businesses in the United States. The company operates through three segments: Community Banking, Wealth Management, and Insurance. The Community Banking segment offers commercial and consumer banking services, including corporate and small business banking, investment real estate financing, business credit, capital market, and lease financing services. It also provides consumer banking products and services, such as deposit products, mortgage and consumer lending services, and mobile and online banking services. The Wealth Management segment provides personal and corporate fiduciary services comprising administration of decedent and trust estates; and securities brokerage and investment advisory services, mutual funds, and annuities. The Insurance segment comprises commercial and personal insurance, and reinsurance products, as well as mezzanine financing options for small- to medium-sized businesses. The company operates community banking branches in Pennsylvania, Ohio, Maryland, West Virginia, North Carolina, South Carolina, Washington, D.C., and Virginia. F.N.B. Corporation was founded in 1864 and is headquartered in Pittsburgh, Pennsylvania.

About Unity Bancorp

Unity Bancorp, Inc. operates as a bank holding company for Unity Bank that provides range of commercial and retail banking services to individuals, small and medium sized businesses, and professional communities. It offers personal and business checking accounts, time deposits, money market accounts, savings accounts, and retirement accounts, as well as noninterest and interest-bearing demand deposits. The company also provides small business administration loans; commercial loans; and residential mortgage and consumer loans, including residential real estate, home equity lines and loans, and residential construction lines, as well as personal loans. In addition, it offers credit and debit cards, wire transfer, safe deposit box, automated teller, and internet and mobile banking services; and automated clearing house origination and remote deposit capture services. Unity Bancorp, Inc. was incorporated in 1991 and is headquartered in Clinton, New Jersey.