Unity Bancorp (NASDAQ:UNTY) versus Valley National Bancorp (NASDAQ:VLY) Head to Head Survey

Unity Bancorp (NASDAQ:UNTY) and Valley National Bancorp (NASDAQ:VLY) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, profitability and earnings.

Institutional and Insider Ownership

42.3% of Unity Bancorp shares are held by institutional investors. Comparatively, 61.0% of Valley National Bancorp shares are held by institutional investors. 29.7% of Unity Bancorp shares are held by company insiders. Comparatively, 1.4% of Valley National Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Unity Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 1.2%. Valley National Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 4.1%. Unity Bancorp pays out 12.1% of its earnings in the form of a dividend. Valley National Bancorp pays out 56.4% 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 increased its dividend for 12 consecutive years.

Valuation & Earnings

This table compares Unity Bancorp and Valley National Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Unity Bancorp	$120.22 million	4.12	$41.45 million	$4.94	9.98
Valley National Bancorp	$3.58 billion	1.69	$380.27 million	$0.78	13.83

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

Risk and Volatility

Unity Bancorp has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, Valley National Bancorp has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Unity Bancorp and Valley National Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Unity Bancorp	0	0	3	0	3.00
Valley National Bancorp	0	2	13	0	2.87

Unity Bancorp presently has a consensus target price of $56.50, suggesting a potential upside of 14.58%. Valley National Bancorp has a consensus target price of $12.68, suggesting a potential upside of 17.50%. Given Valley National Bancorp’s higher possible upside, analysts plainly believe Valley National Bancorp is more favorable than Unity Bancorp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Unity Bancorp	28.72%	15.34%	1.68%
Valley National Bancorp	12.87%	5.89%	0.66%

Summary

Unity Bancorp beats Valley National Bancorp on 9 of the 17 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 Valley National Bancorp

Valley National Bancorp operates as the holding company for Valley National Bank that provides various commercial, private banking, retail, insurance, and wealth management financial services products. It operates through Consumer Banking, Commercial Banking, and Treasury and Corporate other segments. The company offers non-interest bearing, savings, NOW, money market, and time deposit accounts; commercial and industrial, commercial real estate, residential mortgage, and automobile loans; loans secured by the cash surrender value of life insurance; home equity loans and lines of credit; automobile financing; and secured and unsecured other consumer loans. It also invests in various securities and interest-bearing deposits with other banks; and provides international banking services, such as standby and documentary letters of credit, and related products, as well as foreign exchange transactions, documentary collections, and foreign wire transfers services. In addition, the company offers investment services for individuals and small to medium sized businesses; and trusts investment strategies designed for various investment profiles and objectives. Further, it provides trust services, such as living and testamentary trusts, investment management, custodial and escrow services, and estate administration to individuals; tax credit advisory services; brokerage services; property and casualty, life, health, and title insurance agency services; and health care equipment lending and other commercial equipment leasing services, as well as owns real estate related investments. Additionally, the company offers online, mobile, and telephone banking services; receivable, payment, and security solution, merchant, payroll processing, and liquidity services; credit cards; and drive-in and night deposit, automated teller machine, remote deposit capture, and safe deposit facility services. Valley National Bancorp was founded in 1927 and is headquartered in Morristown, New Jersey.