Contrasting Hawthorn Bancshares (NASDAQ:HWBK) and University Bancorp (OTCMKTS:UNIB)

Hawthorn Bancshares (NASDAQ:HWBK) and University Bancorp (OTCMKTS:UNIB) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Dividends

Hawthorn Bancshares pays an annual dividend of $0.84 per share and has a dividend yield of 2.5%. University Bancorp pays an annual dividend of $0.30 per share and has a dividend yield of 1.4%. Hawthorn Bancshares pays out 24.5% of its earnings in the form of a dividend. Hawthorn Bancshares has increased its dividend for 5 consecutive years. Hawthorn Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Hawthorn Bancshares has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500. Comparatively, University Bancorp has a beta of 0.23, suggesting that its share price is 77% less volatile than the S&P 500.

Valuation and Earnings

This table compares Hawthorn Bancshares and University Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hawthorn Bancshares	$111.97 million	2.06	$23.80 million	$3.43	9.73
University Bancorp	$137.51 million	0.83	$9.02 million	N/A	N/A

Hawthorn Bancshares has higher earnings, but lower revenue than University Bancorp.

Analyst Recommendations

This is a summary of recent recommendations for Hawthorn Bancshares and University Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hawthorn Bancshares	0	1	0	0	2.00
University Bancorp	0	0	0	0	0.00

Profitability

This table compares Hawthorn Bancshares and University Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hawthorn Bancshares	21.26%	14.66%	1.25%
University Bancorp	N/A	N/A	N/A

Insider & Institutional Ownership

30.7% of Hawthorn Bancshares shares are owned by institutional investors. 22.7% of Hawthorn Bancshares shares are owned by company insiders. Comparatively, 63.7% of University Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Hawthorn Bancshares beats University Bancorp on 10 of the 13 factors compared between the two stocks.

About Hawthorn Bancshares

Hawthorn Bancshares, Inc. operates as the bank holding company for Hawthorn Bank that provides various banking services in the United States. It accepts checking, savings, money market, individual retirement, and other time deposit accounts, as well as certificates of deposit. The company also offers commercial and industrial, single payment personal, installment, commercial and residential real estate, and consumer loans, as well as equipment, operating, and small business administration loans; and debit and credit cards. In addition, it provides trust services that include estate planning, investment, and asset management services; and cash management, safety deposit box, brokerage, and Internet banking services. Hawthorn Bancshares, Inc. was founded in 1865 and is headquartered in Jefferson City, Missouri.

About University Bancorp

University Bancorp, Inc. operates as the bank holding company for University Bank that provides various personal, business, and community banking services in the United States. It offers checking, NOW, savings, money market, time deposit, and certificates of deposit accounts. The company's consumer loans include home equity, short term, automobile, personal, and recreational vehicle loans, as well as home equity lines of credits; SBA, commercial real estate, equipment, home improvement, and other instalment loans; and non-profit loans, as well as working capital lines of credit. In addition, the company provides foreign currency exchange; reverse mortgage; online banking and bill pay; online reorder checks; wire transfer; and courier services, as well as credit card and ATM services. Further, it offers life, health, property, and casualty insurance products, as well as investment products, including annuities. University Bancorp, Inc. was founded in 1890 and is based in Ann Arbor, Michigan.