Analyzing Hanover Bancorp (NASDAQ:HNVR) & Union Bankshares (NASDAQ:UNB)

Hanover Bancorp (NASDAQ:HNVR) and Union Bankshares (NASDAQ:UNB) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Earnings and Valuation

This table compares Hanover Bancorp and Union Bankshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hanover Bancorp	$148.36 million	1.10	$12.35 million	$1.52	15.00
Union Bankshares	$77.68 million	1.45	$8.76 million	$2.50	9.84

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

Dividends

Hanover Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 1.8%. Union Bankshares pays an annual dividend of $1.44 per share and has a dividend yield of 5.9%. Hanover Bancorp pays out 26.3% of its earnings in the form of a dividend. Union Bankshares pays out 57.6% 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.

Volatility & Risk

Hanover Bancorp has a beta of 0.04, indicating that its stock price is 96% less volatile than the S&P 500. Comparatively, Union Bankshares has a beta of 0.39, indicating that its stock price is 61% less volatile than the S&P 500.

Insider and Institutional Ownership

15.0% of Hanover Bancorp shares are held by institutional investors. Comparatively, 14.8% of Union Bankshares shares are held by institutional investors. 24.8% of Hanover Bancorp shares are held by insiders. Comparatively, 1.8% of Union Bankshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Hanover Bancorp and Union Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hanover Bancorp	7.82%	7.20%	0.60%
Union Bankshares	13.16%	15.88%	0.74%

Analyst Ratings

This is a breakdown of recent recommendations for Hanover Bancorp and Union Bankshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hanover Bancorp	0	3	2	0	2.40
Union Bankshares	0	1	0	0	2.00

Hanover Bancorp currently has a consensus target price of $24.50, indicating a potential upside of 7.46%. Given Hanover Bancorp’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Hanover Bancorp is more favorable than Union Bankshares.

Summary

Hanover Bancorp beats Union Bankshares on 9 of the 16 factors compared between the two stocks.

About Hanover Bancorp

Hanover Bancorp, Inc., a bank holding company for Hanover Community Bank, provides personal and business lending and deposit services to businesses, municipalities, and individuals in the New York metro area. The company offers checking, credit cards, debit cards, money market, savings, government and municipal banking, and professional services, as well as time deposits, including certificate of deposit and individual retirement accounts. It also provides business loans, commercial real estate financing, small business administration, lending directory services, and residential mortgage. In addition, the company offers cash management, online and mobile banking, merchant services, and digital solutions. Its banking offices are located in Nassau, Suffolk, Queens, Kings, New York Counties, New York, Monmouth County, Freehold, and New Jersey. The company was founded in 2008 and is headquartered in Mineola, New York.

About Union Bankshares

Union Bankshares, Inc. operates as the bank holding company for Union Bank that provides retail, commercial, and municipal banking products and services in northern Vermont and New Hampshire. It offers retail depository services, such as personal checking, savings, money market, IRA/SEP/KEOGH, and health savings accounts, as well as certificates of deposit. The company also provides commercial real estate loans; commercial loans for plant and equipment, working capital, real estate renovation, and other business purposes to business owners and investors; small business administration guaranteed loans; residential construction and mortgage loans; municipal financing, including loans and excess deposits secured by FHLBB letters of credit; and home improvement loans and overdraft checking privileges against preauthorized lines of credit. In addition, it offers online cash management services, including account reconciliation, credit card depository, automated clearing house origination, wire transfers, positive pay and night depository services; merchant credit card services for the deposit and immediate credit of sales drafts; remote deposit capture services; and online mortgage application and consumer deposit account opening services. Further, the company provides business checking accounts; standby letters of credit, bank checks or money orders, and safe deposit boxes; ATM cards and services; debit cards; telephone, internet, and mobile banking services, including bill pay; and wealth management, fiduciary, and trust services. It offers retail banking services to individuals; and commercial banking services to small and medium sized business corporations, limited liability companies, partnerships, and sole proprietorships, as well as nonprofit organizations, local municipalities, and school districts. Union Bankshares, Inc. was founded in 1891 and is headquartered in Morrisville, Vermont.