Critical Comparison: ECB Bancorp (NASDAQ:ECBK) vs. Unity Bancorp (NASDAQ:UNTY)

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

Earnings and Valuation

This table compares Unity Bancorp and ECB Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Unity Bancorp	$164.21 million	3.19	$41.45 million	$5.28	9.89
ECB Bancorp	$68.27 million	2.18	$3.99 million	$0.79	21.37

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Unity Bancorp and ECB Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Unity Bancorp	0	0	3	0	3.00
ECB Bancorp	0	1	0	0	2.00

Unity Bancorp currently has a consensus target price of $62.00, suggesting a potential upside of 18.77%. Given Unity Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Unity Bancorp is more favorable than ECB Bancorp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Unity Bancorp	29.85%	15.60%	1.74%
ECB Bancorp	8.69%	3.93%	0.45%

Insider and Institutional Ownership

42.3% of Unity Bancorp shares are held by institutional investors. Comparatively, 30.3% of ECB Bancorp shares are held by institutional investors. 29.7% of Unity Bancorp shares are held by company insiders. Comparatively, 9.0% of ECB Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Unity Bancorp has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500. Comparatively, ECB Bancorp has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500.

Summary

Unity Bancorp beats ECB Bancorp on 13 of the 14 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 ECB Bancorp

ECB Bancorp, Inc. operating as a holding company for Everett Co-operative Bank that provides various banking products and services. The company accepts various deposit products, including certificate of deposit accounts, IRAs, money market accounts, savings accounts, demand deposit accounts, and interest-bearing and noninterest-bearing checking accounts. It also offers one- to four-family residential real estate, commercial real estate and multifamily real estate, construction and land, commercial, and consumer loans, as well as home equity loans and lines of credit. In addition, the company invests in securities, consisting primarily of U.S. government and federal agency obligations, mortgage-backed securities, and corporate bonds. ECB Bancorp, Inc. was founded in 1890 and is based in Everett, Massachusetts.