Unity Bancorp (NASDAQ:UNTY) & Bankwell Financial Group (NASDAQ:BWFG) Head to Head Analysis

Bankwell Financial Group (NASDAQ:BWFG) and Unity Bancorp (NASDAQ:UNTY) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, risk, earnings, valuation and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Bankwell Financial Group and Unity Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bankwell Financial Group	0	0	1	0	3.00
Unity Bancorp	0	0	2	0	3.00

Bankwell Financial Group presently has a consensus target price of $40.00, suggesting a potential upside of 32.54%. Unity Bancorp has a consensus target price of $54.50, suggesting a potential upside of 33.91%. Given Unity Bancorp’s higher probable upside, analysts clearly believe Unity Bancorp is more favorable than Bankwell Financial Group.

Profitability

This table compares Bankwell Financial Group and Unity Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bankwell Financial Group	4.76%	3.48%	0.30%
Unity Bancorp	25.24%	15.08%	1.59%

Valuation & Earnings

This table compares Bankwell Financial Group and Unity Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bankwell Financial Group	$87.00 million	2.74	$9.31 million	$1.18	25.58
Unity Bancorp	$105.94 million	3.86	$41.45 million	$4.06	10.02

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

Dividends

Bankwell Financial Group pays an annual dividend of $0.80 per share and has a dividend yield of 2.7%. Unity Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 1.4%. Bankwell Financial Group pays out 67.8% of its earnings in the form of a dividend. Unity Bancorp pays out 13.8% 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. Unity Bancorp has raised its dividend for 12 consecutive years.

Insider & Institutional Ownership

35.8% of Bankwell Financial Group shares are owned by institutional investors. Comparatively, 42.3% of Unity Bancorp shares are owned by institutional investors. 19.2% of Bankwell Financial Group shares are owned by insiders. Comparatively, 29.7% of Unity Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

Bankwell Financial Group has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500. Comparatively, Unity Bancorp has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500.

Summary

Unity Bancorp beats Bankwell Financial Group on 13 of the 15 factors compared between the two stocks.

About Bankwell Financial Group

Bankwell Financial Group, Inc. operates as the bank holding company for Bankwell Bank that provides various banking services for individual and commercial customers. It offers various traditional depository products, including checking, savings, money market, and certificates of deposit. The company also provides first mortgage loans secured by one-to-four family owner occupied residential properties for personal use; home equity loans and home equity lines of credit secured by owner occupied one-to-four family residential properties; loans secured by commercial real estate, multi-family dwellings, owner-occupied commercial real estate, and investor-owned one-to-four family dwellings; commercial construction loans for commercial development projects, including apartment buildings and condominiums, as well as office buildings, retail, and other income producing properties; land loans; commercial business loans secured by assignments of corporate assets and personal guarantees of the business owners; loans to finance insurance premiums; overdraft lines of credit; and unsecured personal loans. It operates branches in New Canaan, Stamford, Fairfield, Westport, Darien, Norwalk, and Hamden, Connecticut. The company was formerly known as BNC Financial Group, Inc. and changed its name to Bankwell Financial Group, Inc. in September 2013. Bankwell Financial Group, Inc. was founded in 2002 and is headquartered in New Canaan, Connecticut.

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.