Financial Survey: United Bancorporation of Alabama (OTCMKTS:UBAB) and First Financial Northwest (NASDAQ:FFNW)

United Bancorporation of Alabama (OTCMKTS:UBAB) and First Financial Northwest (NASDAQ:FFNW) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.

Profitability

This table compares United Bancorporation of Alabama and First Financial Northwest’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Bancorporation of Alabama	31.02%	19.42%	1.93%
First Financial Northwest	1.34%	0.67%	0.07%

Volatility & Risk

United Bancorporation of Alabama has a beta of 0.33, meaning that its share price is 67% less volatile than the S&P 500. Comparatively, First Financial Northwest has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500.

Dividends

United Bancorporation of Alabama pays an annual dividend of $1.20 per share and has a dividend yield of 2.2%. First Financial Northwest pays an annual dividend of $0.13 per share and has a dividend yield of 0.6%. United Bancorporation of Alabama pays out 15.8% of its earnings in the form of a dividend. First Financial Northwest pays out 118.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. United Bancorporation of Alabama is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

5.5% of United Bancorporation of Alabama shares are held by institutional investors. Comparatively, 55.0% of First Financial Northwest shares are held by institutional investors. 7.2% of First Financial Northwest shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares United Bancorporation of Alabama and First Financial Northwest”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Bancorporation of Alabama	$87.26 million	2.07	$26.90 million	$7.58	7.06
First Financial Northwest	$37.56 million	5.56	$1.07 million	$0.11	205.73

United Bancorporation of Alabama has higher revenue and earnings than First Financial Northwest. United Bancorporation of Alabama is trading at a lower price-to-earnings ratio than First Financial Northwest, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations for United Bancorporation of Alabama and First Financial Northwest, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Bancorporation of Alabama	0	0	0	0	0.00
First Financial Northwest	0	2	0	0	2.00

First Financial Northwest has a consensus price target of $22.75, suggesting a potential upside of 0.53%. Given First Financial Northwest’s stronger consensus rating and higher probable upside, analysts clearly believe First Financial Northwest is more favorable than United Bancorporation of Alabama.

Summary

United Bancorporation of Alabama beats First Financial Northwest on 8 of the 15 factors compared between the two stocks.

About United Bancorporation of Alabama

United Bancorporation of Alabama, Inc. operates as the bank holding company for United Bank that provides banking services. The company offers checking and savings accounts, certificates of deposit, individual retirement accounts, small business programs, business solutions, merchant services, and cash management services. It also provides various lending services, such as personal loans, business loans, lines of credit, and equipment loans; real estate loans for the agricultural community and working lines of credit; and overdraft services. In addition, the company offers debit cards, prepaid cards, Visa credit cards, gift cards, and safe deposit boxes. Further, it provides check cashing, convenience, remote deposit, mobile check deposit, personal storage compartments, Web payment options, insurance products, investment and brokerage, and online and mobile banking services. United Bancorporation of Alabama, Inc. was founded in 1904 and is based in Atmore, Alabama.

About First Financial Northwest

First Financial Northwest, Inc. operates as the bank holding company for First Financial Northwest Bank that provides commercial banking services in Washington. The company offers a range of deposit products, including noninterest-bearing accounts, interest-bearing demand accounts, money market accounts, savings accounts, and certificates of deposit. Its loan products comprise one-to-four family residential loans; multifamily and commercial real estate loans; construction/land loans; business loans; and consumer loans, such as home equity loans, lines of credit, second mortgage term loans, auto loans, and savings account loans. The company also provides wealth management services; and online banking services, as well as debit cards and ATMs. The company was founded in 1923 and is headquartered in Renton, Washington.