HarborOne Bancorp (NASDAQ:HONE) versus United Community Banks (NASDAQ:UCBI) Critical Analysis

HarborOne Bancorp (NASDAQ:HONE) and United Community Banks (NASDAQ:UCBI) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Risk & Volatility

HarborOne Bancorp has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, United Community Banks has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500.

Profitability

This table compares HarborOne Bancorp and United Community Banks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HarborOne Bancorp 9.30% 3.53% 0.53%
United Community Banks 25.98% 11.07% 1.38%

Valuation & Earnings

This table compares HarborOne Bancorp and United Community Banks’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
HarborOne Bancorp $215.76 million 2.10 $18.27 million $0.33 23.45
United Community Banks $657.42 million 2.33 $185.72 million $2.38 8.23

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

Institutional & Insider Ownership

49.4% of HarborOne Bancorp shares are owned by institutional investors. Comparatively, 89.8% of United Community Banks shares are owned by institutional investors. 3.3% of HarborOne Bancorp shares are owned by insiders. Comparatively, 1.2% of United Community Banks shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for HarborOne Bancorp and United Community Banks, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HarborOne Bancorp 0 1 2 0 2.67
United Community Banks 0 3 1 0 2.25

HarborOne Bancorp currently has a consensus price target of $9.75, indicating a potential upside of 25.97%. United Community Banks has a consensus price target of $26.38, indicating a potential upside of 34.70%. Given United Community Banks’ higher probable upside, analysts plainly believe United Community Banks is more favorable than HarborOne Bancorp.

Summary

United Community Banks beats HarborOne Bancorp on 10 of the 14 factors compared between the two stocks.

HarborOne Bancorp Company Profile

HarborOne Bancorp, Inc. operates as the holding company for HarborOne Bank that provides financial services to individuals, families, small and middle-market businesses, and municipalities throughout Southeastern New England. Its primary deposit products include checking, money market, savings, and term certificate of deposit accounts; and lending products comprise commercial real estate loans, commercial loans, construction loans, one- to four-family residential real estate loans, second mortgages and equity lines of credit, and auto and other consumer loans. The company, through its subsidiary, Merrimack Mortgage Company, LLC, also originates, sells, and services residential mortgage loans. As of December 31, 2017, it operated 14 full-service branches, 2 limited service branches, 1 commercial loan office, 1 lending office, and 13 free-standing ATMs. In addition, the company offers a range of educational services through ‘HarborOne U,' with classes on small business, financial literacy, and personal enrichment. HarborOne Bancorp, Inc. was founded in 1917 and is based in Brockton, Massachusetts. HarborOne Bancorp, Inc. is a subsidiary of Harborone Mutual Bancshares, Mhc.

United Community Banks Company Profile

United Community Banks, Inc. operates as the bank holding company for United Community Bank that provides retail and corporate banking services to individuals and businesses. It offers various deposit accounts, such as checking accounts, savings and time deposits accounts, NOW accounts, money market deposits, and certificates of deposit. The company also provides secured and unsecured loans that include commercial real estate, commercial and industrial, commercial construction, residential construction and mortgage, and indirect auto loans, as well as home equity lines of credits and fixed and adjustable-rate home mortgage loans. It also offers wire transfers, brokerage services, and other financial services, as well as risk management, payment processing, and merchant services. In addition, the company owns an insurance agency. As of December 31, 2017, it operated 156 locations in Georgia, North Carolina, South Carolina, and Tennessee. United Community Banks, Inc. was founded in 1950 and is based in Blairsville, Georgia.

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