Analyzing First United (NASDAQ:FUNC) & Hingham Institution for Savings (NASDAQ:HIFS)

First United (NASDAQ:FUNC) and Hingham Institution for Savings (NASDAQ:HIFS) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, dividends, risk and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and target prices for First United and Hingham Institution for Savings, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First United	0	0	2	0	3.00
Hingham Institution for Savings	0	0	1	0	3.00

First United currently has a consensus price target of $44.50, suggesting a potential downside of 1.98%. Given First United’s higher probable upside, research analysts plainly believe First United is more favorable than Hingham Institution for Savings.

Volatility & Risk

First United has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500. Comparatively, Hingham Institution for Savings has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Profitability

This table compares First United and Hingham Institution for Savings’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First United	20.55%	13.39%	1.31%
Hingham Institution for Savings	21.17%	7.89%	0.81%

Institutional and Insider Ownership

33.3% of First United shares are owned by institutional investors. Comparatively, 49.3% of Hingham Institution for Savings shares are owned by institutional investors. 8.1% of First United shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

First United pays an annual dividend of $1.04 per share and has a dividend yield of 2.3%. Hingham Institution for Savings pays an annual dividend of $2.52 per share and has a dividend yield of 0.8%. First United pays out 26.6% of its earnings in the form of a dividend. Hingham Institution for Savings pays out 11.0% 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. First United has increased its dividend for 6 consecutive years. First United is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares First United and Hingham Institution for Savings”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First United	$121.42 million	2.41	$24.51 million	$3.91	11.61
Hingham Institution for Savings	$236.78 million	2.83	$54.55 million	$22.81	13.48

Hingham Institution for Savings has higher revenue and earnings than First United. First United is trading at a lower price-to-earnings ratio than Hingham Institution for Savings, indicating that it is currently the more affordable of the two stocks.

Summary

Hingham Institution for Savings beats First United on 9 of the 16 factors compared between the two stocks.

About First United

First United Corporation operates as the bank holding company for First United Bank & Trust that provides various retail and commercial banking services to businesses and individuals. It offers various deposit products, which includes checking, savings, money market deposit, and regular and individual retirement accounts (IRAs), as well as certificates of deposit. The company loan portfolio includes commercial loans secured by real estate, commercial equipment, vehicles, or other assets of the borrower; commercial real estate loans for residential and commercial development, agricultural purpose properties, and service industry buildings, such as restaurants and motels, retail buildings, and general purpose business space; residential mortgage loans; home equity lines of credit; residential real estate construction loans; and indirect and direct auto loans, student loans, and other secured and unsecured lines of credit and term loans. It also offers access to multi-million-dollar certificates of deposit and the Intrafi cash service, including multi-million-dollar savings and demand deposits to municipalities, businesses, and consumers; and treasury management, cash sweep, and various checking services. In addition, the company provides trust services, which includes personal trust, investment agency accounts, charitable trusts, retirement accounts, including IRA roll-overs, 401(k) accounts and defined benefit plans, estate administration, and estate planning; and insurance products, brokerage services, and safe deposit and night depository facilities. First United Corporation was founded in 1900 and is headquartered in Oakland, Maryland.

About Hingham Institution for Savings

Hingham Institution for Savings provides various financial products and services to individuals and small businesses in the United States. It offers savings, checking, money market, demand, and negotiable order of withdrawal accounts, as well as certificates of deposit. The company provides commercial and residential real estate, construction, home equity, commercial, consumer, and mortgage loans. In addition, it offers ATMs, debit cards, and Internet-based banking services. The company offers its services through a network of offices in Boston; Washington, D.C.; and San Francisco Bay Area. Hingham Institution for Savings was incorporated in 1834 and is headquartered in Hingham, Massachusetts.