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United Bancorp: +31% Q2 EPS, 4.5% Dividend Yield, 18% EPS 5-Year CAGR, 50% Upside

Aug. 04, 2021 11:00 PM ETUnited Bancorp, Inc. (UBCP) Stock5 Comments


  • Q2 strong results with 31% net income growth, after record EPS in FY2020.
  • Attractive 4.5% dividend yield, strong 39-year dividend track record, 5 Special Dividends in last 5 years.
  • Maintain $20 target [so total return of over 50%]; recent stock weakness in July a buying opportunity.
  • Stock trading at only 1.1x trailing Price/Book - Book Value up 7% QoQ & 4% YoY, with high 18.1% capital adequacy, low NPLs, and excess provisioning.
  • +18% EPS five-year CAGR, well managed with only five CEOs in 120-year history.

Banking time
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31% Net Income Growth in Q2

United Bancorp (NASDAQ:UBCP) reported very strong +31% YoY net income [+18% EPS] growth for Q2 ended June, which was a record quarter for the company. This continues a string of strong quarterly results in 2020

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Value Investment Principals [VIP] has a 12-year track record, starting in 2009, focusing on unique under-covered stocks. Our typical ideas have zero/limited research coverage, “deep-value”, growth, high cash and FCF [Free Cash Flow]. We search for High Dividend Yields to appeal to retail clients, creating a steady source of income. We have a strong track record of performance for both large institutional and High Net-Worth Individuals [HNIs].Approximately 2/3 of our ideas have been in growth industries (with earnings growth of more than 2x the GDP growth rate). Our deep-value ideas all have multiple catalysts that are likely to unfold over the next 6-12 months to unlock value. We offer 10+ page research reports with detailed IS/BS/CF forecasts, rigorous ratio analysis and Discounted Cash Flow valuations alongside price targets on all recommendations. Our team consists of 3 highly skilled analysts with Masters degrees and extensive industry experience. Bottom-line, all of our ideas have been ignored by Wall Street analysts, and this creates opportunity in undervalued, under followed stocks with high dividend yields and growth.Sandy Mehta, CFA, our founder and Director, has over 30-years’ experience as a PM of a 5-Star award-winning small-cap fund as well as a flagship $15 billion Global Equity Fund. Sandy also founded Acumen Capital Management in 2004, and incubated a global long-short $200 million Hedge Fund. In 2015, he founded equity research firm Evaluate Research, his third entrepreneurial venture in global financial services, focusing on unfollowed equities. He has an MBA degree [Director’s List Honors] from the Wharton School, and a Master of International Management [with Honors] from the American Graduate School of International Management. He attained his CFA at the age of 25.

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Comments (5)

User51_P profile picture
Great stock idea! Worth investing in! Impressed with the nearly 5% yield. Thanks much, really appreciate your research
craftbrewinfo profile picture
Just jumped in today at 4% yield. I like what I see after I further investigated. Thanks @Value Investment Principals . I was looking to add another bank to my portfolio and this one for the bill
@Value Investment Principals Do you have any idea why Ford has recently changed their recommendation from a 1 [Buy] to a 3 [hold] and Refinitiv has it as a sell?
Joseph Webster profile picture
Thanks for the article. I reviewed this month's Dividend Kings list and narrowed the best stocks to UBCP and MPB, so this helps with research. Just hit follow since we seem to be attracted to the same types of stocks.
vantuckman profile picture
Thanks for this article. I need to do more research, but this looks like a stock that, once I buy it, I may want to sleep on for a decade and check back in. Cheers, Kirk
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