Financial Analysis: United Financial Bancorp (UBNK) & Wellesley Bancorp (WEBK)

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United Financial Bancorp (NASDAQ:UBNK) and Wellesley Bancorp (NASDAQ:WEBK) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitability.

Institutional & Insider Ownership

67.5% of United Financial Bancorp shares are owned by institutional investors. Comparatively, 10.4% of Wellesley Bancorp shares are owned by institutional investors. 3.4% of United Financial Bancorp shares are owned by company insiders. Comparatively, 16.7% of Wellesley Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

United Financial Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 3.1%. Wellesley Bancorp pays an annual dividend of $0.22 per share and has a dividend yield of 0.7%. United Financial Bancorp pays out 41.0% of its earnings in the form of a dividend. Wellesley Bancorp has increased its dividend for 3 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for United Financial Bancorp and Wellesley Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Financial Bancorp 0 1 0 0 2.00
Wellesley Bancorp 0 0 0 0 N/A

Earnings & Valuation

This table compares United Financial Bancorp and Wellesley Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
United Financial Bancorp $309.73 million 2.56 $59.91 million $1.17 13.30
Wellesley Bancorp $36.22 million 2.18 $5.99 million N/A N/A

United Financial Bancorp has higher revenue and earnings than Wellesley Bancorp.

Volatility & Risk

United Financial Bancorp has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500. Comparatively, Wellesley Bancorp has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500.

Profitability

This table compares United Financial Bancorp and Wellesley Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
United Financial Bancorp 19.34% 8.53% 0.84%
Wellesley Bancorp 16.54% 9.74% 0.72%

Summary

United Financial Bancorp beats Wellesley Bancorp on 7 of the 13 factors compared between the two stocks.

About United Financial Bancorp

United Financial Bancorp, Inc. operates as the holding company for United Bank that provides retail, commercial, and consumer banking services to individuals, families, and businesses. The company accepts various deposits, such as interest-bearing checking, non-interest-bearing checking, regular savings, money market savings, and time deposits. Its loan products include commercial loans, commercial real estate loans, residential and commercial construction loans, residential real estate loans collateralized by one-to-four family residences, home equity lines of credit, fixed rate loans, marine floor plan loans, and other consumer loans. In addition, the company provides various financial advisory services. It has 53 banking offices, 64 ATMs, and 7 loan production offices in Connecticut and Massachusetts. The company was formerly known as Rockville Financial, Inc. and changed its name to United Financial Bancorp, Inc. in April 2014. United Financial Bancorp, Inc. was founded in 1858 and is headquartered in Hartford, Connecticut.

About Wellesley Bancorp

Wellesley Bancorp, Inc. operates as the bank holding company for Wellesley Bank that provides various financial services to individuals, non-profit organizations, small businesses, and other entities in eastern Massachusetts. Its deposit products include noninterest-bearing demand deposits, such as checking accounts; interest-bearing demand accounts comprising negotiable order of withdrawal and money market accounts; savings accounts; and certificates of deposit. The company also offers residential mortgage loans, commercial real estate loans, and construction loans, as well as home equity lines of credit; other consumer loans that consist of fixed-rate second mortgage loans, automobile loans, loans secured by passbook or certificate accounts, and overdraft loans; and commercial business loans, such as term loans, revolving lines of credit, and equipment loans. In addition, it provides investment advisory services and remote capture products; and engages in buying, selling, and holding securities. As of December 31, 2017, Wellesley Bancorp, Inc. operated through executive offices and five full service branch offices located in Wellesley, Newton, and Boston; limited- hour branch service office in Needham, Massachusetts; and one full-service branch office in Newton Centre and Boston, as well as wealth management offices located in Wellesley. The company was founded in 1911 and is headquartered in Wellesley, Massachusetts.

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