Horizon Bancorp (NASDAQ:HBNC) and Union Bankshares (NASDAQ:UNB) Critical Survey

Union Bankshares (NASDAQ:UNB) and Horizon Bancorp (NASDAQ:HBNC) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitability.

Dividends

Union Bankshares pays an annual dividend of $1.44 per share and has a dividend yield of 5.7%. Horizon Bancorp pays an annual dividend of $0.64 per share and has a dividend yield of 4.1%. Union Bankshares pays out 60.8% of its earnings in the form of a dividend. Horizon Bancorp pays out 118.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Union Bankshares has increased its dividend for 11 consecutive years and Horizon Bancorp has increased its dividend for 13 consecutive years. Union Bankshares is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Union Bankshares has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, Horizon Bancorp has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500.

Valuation & Earnings

This table compares Union Bankshares and Horizon Bancorp’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Union Bankshares	$67.01 million	1.70	$11.26 million	$2.37	10.62
Horizon Bancorp	$324.30 million	2.09	$27.98 million	$0.54	28.72

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

Institutional & Insider Ownership

14.8% of Union Bankshares shares are held by institutional investors. Comparatively, 64.5% of Horizon Bancorp shares are held by institutional investors. 1.1% of Union Bankshares shares are held by insiders. Comparatively, 2.8% of Horizon Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Union Bankshares and Horizon Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Union Bankshares	13.63%	16.36%	0.70%
Horizon Bancorp	5.50%	8.17%	0.74%

Analyst Ratings

This is a breakdown of recent recommendations for Union Bankshares and Horizon Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Union Bankshares	0	0	0	0	N/A
Horizon Bancorp	0	2	1	0	2.33

Horizon Bancorp has a consensus target price of $15.33, indicating a potential downside of 1.14%. Given Horizon Bancorp’s higher possible upside, analysts plainly believe Horizon Bancorp is more favorable than Union Bankshares.

Summary

Horizon Bancorp beats Union Bankshares on 11 of the 16 factors compared between the two stocks.

About Union Bankshares

Union Bankshares, Inc. operates as the bank holding company for Union Bank that provides retail, commercial, and municipal banking products and services in northern Vermont and New Hampshire. It offers retail depository services, such as personal checking, savings, money market, IRA/SEP/KEOGH, and health savings accounts, as well as certificates of deposit. The company also provides commercial real estate loans; commercial loans for plant and equipment, working capital, real estate renovation, and other business purposes to business owners and investors; small business administration guaranteed loans; residential construction and mortgage loans; municipal financing, including loans and excess deposits secured by FHLBB letters of credit; and home improvement loans and overdraft checking privileges against preauthorized lines of credit. In addition, it offers online cash management services, including account reconciliation, credit card depository, automated clearing house origination, wire transfers, positive pay and night depository services; merchant credit card services for the deposit and immediate credit of sales drafts; remote deposit capture services; and online mortgage application and consumer deposit account opening services. Further, the company provides business checking accounts; standby letters of credit, bank checks or money orders, and safe deposit boxes; ATM cards and services; debit cards; telephone, internet, and mobile banking services, including bill pay; and wealth management, fiduciary, and trust services. It offers retail banking services to individuals; and commercial banking services to small and medium sized business corporations, limited liability companies, partnerships, and sole proprietorships, as well as nonprofit organizations, local municipalities, and school districts. Union Bankshares, Inc. was founded in 1891 and is headquartered in Morrisville, Vermont.

About Horizon Bancorp

Horizon Bancorp, Inc. operates as the bank holding company for Horizon Bank that engages in the provision of commercial and retail banking services. The company offers checking, saving, money market, certificate of deposits, individual retirement accounts, and time deposits, as well as non-interest- and interest-bearing demand deposits. It also provides commercial, residential real estate, mortgage, home equity, auto, personal, business, agricultural, and SBA loans, as well as credit cards. In addition, the company offers corporate and individual trust and agency, investment management, and real estate investment trust services; debit cards; treasury management; online and mobile banking; wealth, retirement, and estate and trust services; and sells various insurance products. It operates through full-service offices in northern and central Indiana and southern and central Michigan. Horizon Bancorp, Inc. was founded in 1873 and is headquartered in Michigan City, Indiana.