Head-To-Head Contrast: Orange County Bancorp (NASDAQ:OBT) versus Unity Bancorp (NASDAQ:UNTY)

Unity Bancorp (NASDAQ:UNTY) and Orange County Bancorp (NASDAQ:OBT) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitability and dividends.

Profitability

This table compares Unity Bancorp and Orange County Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Unity Bancorp	24.37%	14.71%	1.50%
Orange County Bancorp	24.81%	21.15%	1.41%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Unity Bancorp and Orange County Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Unity Bancorp	0	0	1	0	3.00
Orange County Bancorp	0	0	1	0	3.00

Unity Bancorp currently has a consensus target price of $39.00, suggesting a potential upside of 14.98%. Orange County Bancorp has a consensus target price of $69.00, suggesting a potential upside of 15.67%. Given Orange County Bancorp’s higher probable upside, analysts clearly believe Orange County Bancorp is more favorable than Unity Bancorp.

Dividends

Unity Bancorp pays an annual dividend of $0.52 per share and has a dividend yield of 1.5%. Orange County Bancorp pays an annual dividend of $0.92 per share and has a dividend yield of 1.5%. Unity Bancorp pays out 13.7% of its earnings in the form of a dividend. Orange County Bancorp pays out 14.6% 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 11 consecutive years.

Earnings and Valuation

This table compares Unity Bancorp and Orange County Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Unity Bancorp	$151.64 million	2.23	$39.71 million	$3.79	8.95
Orange County Bancorp	$111.60 million	3.02	$29.48 million	$6.31	9.45

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

Insider & Institutional Ownership

42.3% of Unity Bancorp shares are held by institutional investors. Comparatively, 42.5% of Orange County Bancorp shares are held by institutional investors. 28.9% of Unity Bancorp shares are held by company insiders. Comparatively, 10.5% of Orange County Bancorp shares are held by company 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

Unity Bancorp has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, Orange County Bancorp has a beta of 0.33, meaning that its share price is 67% less volatile than the S&P 500.

Summary

Orange County Bancorp beats Unity Bancorp on 8 of the 15 factors compared between the two stocks.

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.

About Orange County Bancorp

Orange County Bancorp, Inc., through its subsidiaries, provides commercial and consumer banking products and services, and trust and wealth management services to small businesses, middle-market enterprises, local municipal governments, and individuals. It accepts various deposits, including interest-bearing and noninterest-bearing demand accounts, money market deposit accounts, savings accounts, and certificates of deposit. The company also offers commercial real estate loans, commercial and industrial loans, commercial real estate construction loans, residential real estate loans, home equity loans, and consumer loans. In addition, it provides traditional trust and administration, asset management, financial planning, and wealth management services. The company operates full-service branches and loan production office in Orange, Westchester, Rockland, and Bronx counties in New York. Orange County Bancorp, Inc. was founded in 1892 and is headquartered in Middletown, New York.