Head to Head Analysis: United Security Bancshares (NASDAQ:UBFO) versus Chesapeake Financial Shares (OTCMKTS:CPKF)

United Security Bancshares (NASDAQ:UBFO) and Chesapeake Financial Shares (OTCMKTS:CPKF) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Dividends

United Security Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 6.6%. Chesapeake Financial Shares pays an annual dividend of $0.62 per share and has a dividend yield of 3.7%. United Security Bancshares pays out 46.2% of its earnings in the form of a dividend. Chesapeake Financial Shares pays out 31.8% 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. United Security Bancshares has raised its dividend for 1 consecutive years. United Security Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares United Security Bancshares and Chesapeake Financial Shares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Security Bancshares	27.07%	15.14%	1.42%
Chesapeake Financial Shares	10.68%	9.72%	0.64%

Valuation & Earnings

This table compares United Security Bancshares and Chesapeake Financial Shares’ gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Security Bancshares	$65.95 million	1.91	$19.80 million	$1.04	6.99
Chesapeake Financial Shares	$82.72 million	0.96	$10.12 million	$1.95	8.59

United Security Bancshares has higher earnings, but lower revenue than Chesapeake Financial Shares. United Security Bancshares is trading at a lower price-to-earnings ratio than Chesapeake Financial Shares, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings for United Security Bancshares and Chesapeake Financial Shares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Security Bancshares	0	0	0	0	N/A
Chesapeake Financial Shares	0	0	0	0	N/A

Volatility & Risk

United Security Bancshares has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500. Comparatively, Chesapeake Financial Shares has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500.

Insider and Institutional Ownership

30.9% of United Security Bancshares shares are owned by institutional investors. Comparatively, 3.7% of Chesapeake Financial Shares shares are owned by institutional investors. 20.1% of United Security Bancshares shares are owned by company insiders. Comparatively, 39.5% of Chesapeake Financial Shares shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

United Security Bancshares beats Chesapeake Financial Shares on 9 of the 14 factors compared between the two stocks.

About United Security Bancshares

United Security Bancshares operates as the bank holding company for United Security Bank, a state-chartered bank that provides a range of commercial banking services to the business and professional community, and individuals in California. The company accepts various deposit products, including personal and business checking accounts, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificates of deposit. It also provides real estate mortgage, commercial and industrial, real estate construction and development, and consumer loans, as well as agricultural, installment, and student loans. In addition, the company offers online and mobile banking, safe deposit boxes, wire transfers, payroll direct deposit, cashier's check, cash management, and foreign draft services, as well as interactive teller machines; and person-to-person and bank-to-bank transfers for consumer customers. United Security Bancshares was founded in 1987 and is headquartered in Fresno, California.

About Chesapeake Financial Shares

Chesapeake Financial Shares, Inc. operates as the bank holding company for Chesapeake Bank that provides various banking products and services for individuals and businesses in the United States. The company accepts interest and noninterest checking, savings, and money market accounts; and variable-rate and fixed-term money market accounts, as well as certificates of deposit. It also offers mortgage, and single-family residential and residential construction loans; commercial loans, which include owner-occupied commercial development, retail, builders/contractors, medical, service and professional, hospitality, nonprofits, marine industry, and agricultural and seafood loans; and consumer and other loans. In addition, the company provides merchant processing, accounts receivable financing, wealth management and trust, and mortgage banking services, as well as cash management services. The company was founded in 1900 and is based in Kilmarnock, Virginia.