Analyzing National Bankshares (NASDAQ:NKSH) and United Bancshares (NASDAQ:UBOH)

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

Volatility and Risk

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

Dividends

National Bankshares pays an annual dividend of $1.46 per share and has a dividend yield of 5.1%. United Bancshares pays an annual dividend of $0.88 per share and has a dividend yield of 4.1%. National Bankshares pays out 94.2% 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 Bancshares pays out 31.3% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for National Bankshares and United Bancshares, as reported 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

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Bankshares	$68.19 million	2.68	$15.69 million	$1.55	18.55
United Bancshares	$46.23 million	1.37	$8.61 million	$2.81	7.56

National Bankshares has higher revenue and earnings 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.

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

Insider and Institutional Ownership

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

Summary

National Bankshares beats United Bancshares on 9 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.