Reviewing Orange County Bancorp (NASDAQ:OBT) and Unity Bancorp (NASDAQ:UNTY)

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

Analyst Ratings

This is a summary of current ratings and price targets for Orange County Bancorp and Unity Bancorp, as provided by MarketBeat.

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

Orange County Bancorp presently has a consensus price target of $69.00, indicating a potential upside of 26.28%. Unity Bancorp has a consensus price target of $39.00, indicating a potential upside of 18.79%. Given Orange County Bancorp’s higher probable upside, analysts clearly believe Orange County Bancorp is more favorable than Unity Bancorp.

Dividends

Orange County Bancorp pays an annual dividend of $0.92 per share and has a dividend yield of 1.7%. Unity Bancorp pays an annual dividend of $0.52 per share and has a dividend yield of 1.6%. Orange County Bancorp pays out 14.6% of its earnings in the form of a dividend. Unity Bancorp pays out 13.7% 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.

Institutional & Insider Ownership

42.5% of Orange County Bancorp shares are owned by institutional investors. Comparatively, 42.3% of Unity Bancorp shares are owned by institutional investors. 10.5% of Orange County Bancorp shares are owned by company insiders. Comparatively, 28.9% of Unity Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

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

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

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orange County Bancorp	$111.60 million	2.77	$29.48 million	$6.31	8.66
Unity Bancorp	$151.64 million	2.16	$39.71 million	$3.79	8.66

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

Volatility and Risk

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

Summary

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

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.

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.