Critical Contrast: National Bankshares (NASDAQ:NKSH) vs. United Bancshares (NASDAQ:UBOH)

National Bankshares (NASDAQ:NKSH) and United Bancshares (NASDAQ:UBOH) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Insider & Institutional Ownership

29.7% of National Bankshares shares are held by institutional investors. Comparatively, 1.0% of United Bancshares shares are held by institutional investors. 2.8% of National Bankshares shares are held by insiders. Comparatively, 6.6% of United Bancshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares National Bankshares and United Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Bankshares	12.65%	6.70%	0.54%
United Bancshares	14.34%	N/A	N/A

Dividends

National Bankshares pays an annual dividend of $1.46 per share and has a dividend yield of 4.9%. United Bancshares pays an annual dividend of $0.88 per share and has a dividend yield of 4.3%. National Bankshares pays out 64.6% of its earnings in the form of a dividend. United Bancshares pays out 31.2% 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.

Analyst Recommendations

This is a summary of recent ratings and price targets for National Bankshares and United Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Bankshares	0	0	0	0	N/A
United Bancshares	0	0	0	0	N/A

Risk and Volatility

National Bankshares has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, United Bancshares has a beta of 0.36, indicating that its stock price is 64% less volatile than the S&P 500.

Valuation and Earnings

This table compares National Bankshares and United Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Bankshares	$42.88 million	4.13	$15.69 million	$2.26	13.29
United Bancshares	$54.58 million	1.12	$8.61 million	$2.82	7.27

National Bankshares has higher earnings, but lower revenue than United Bancshares. United Bancshares is trading at a lower price-to-earnings ratio than National Bankshares, indicating that it is currently the more affordable of the two stocks.

Summary

National Bankshares beats United Bancshares on 8 of the 13 factors compared between the two stocks.

About National Bankshares

National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking products and services to individuals, businesses, non-profits, and local governments. The company accepts interest-bearing and non-interest-bearing demand deposit accounts, money market deposit accounts, savings accounts, certificates of deposit, health savings accounts, and individual retirement accounts. Its loan products include commercial and agricultural, commercial real estate, residential real estate, home equity, and various consumer loan products, as well as loans for the construction of commercial and residential properties. The company also provides business and consumer debit and credit cards; letters of credit, night depository services, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services; non-deposit investment and insurance products; and telephone, mobile, and Internet banking services. The company was founded in 1891 and is headquartered in Blacksburg, Virginia.

About United Bancshares

United Bancshares, Inc. operates as the bank holding company for The Union Bank Company that provides various commercial and consumer banking services. The company accepts various deposits products, such as checking, savings, demand deposit, money market deposit, term certificate, and individual retirement accounts, as well as certificates of deposit. Its loan products include commercial and residential real estate, agricultural, commercial and industrial, home equity, and various types of consumer and small business administration loans. In addition, the company offers wealth management, financial needs analysis, mutual funds, securities trading, annuities, and life insurance services; and treasury management, online and mobile banking, automatic teller machine, bill pay, safe deposit box rental, payment, and other personalized services. It also operates full service banking centers and loan production offices in northwest and central Ohio. United Bancshares, Inc. was founded in 1904 and is headquartered in Columbus Grove, Ohio.