3 Banking Stocks Driving The Industry Higher

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Two out of the three major indices are trading lower today with the Dow Jones Industrial Average ( ^DJI) trading down 18.94 points (-0.1%) at 16,725 as of Tuesday, June 3, 2014, 3:55 PM ET. The NYSE advances/declines ratio sits at 1,153 issues advancing vs. 1,837 declining with 172 unchanged.

The Banking industry as a whole was unchanged today versus the S&P 500, which was unchanged. Top gainers within the Banking industry included Georgetown Bancorp ( GTWN), up 3.2%, QC Holdings ( QCCO), up 1.8%, NB&T Financial Group ( NBTF), up 4.7%, DNB Financial ( DNBF), up 7.8% and United Security ( UBFO), up 2.0%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:

United Security ( UBFO) is one of the companies that pushed the Banking industry higher today. United Security was up $0.11 (2.0%) to $5.60 on light volume. Throughout the day, 2,186 shares of United Security exchanged hands as compared to its average daily volume of 6,600 shares. The stock ranged in a price between $5.50-$5.87 after having opened the day at $5.50 as compared to the previous trading day's close of $5.49.

United Security Bancshares operates as the bank holding company for United Security Bank that provides a range of commercial banking services primarily to the business and professional community, and individuals in California. United Security has a market cap of $84.5 million and is part of the financial sector. Shares are up 14.8% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate United Security a buy, no analysts rate it a sell, and none rate it a hold.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates United Security as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on UBFO go as follows:

  • UBFO's revenue growth has slightly outpaced the industry average of 2.4%. Since the same quarter one year prior, revenues slightly increased by 4.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, UBFO's share price has jumped by 36.79%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, UBFO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The gross profit margin for UNITED SECURITY BANCSHARS CA is currently very high, coming in at 95.76%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, UBFO's net profit margin of 13.95% significantly trails the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, UNITED SECURITY BANCSHARS CA has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • UNITED SECURITY BANCSHARS CA's earnings per share declined by 10.8% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, UNITED SECURITY BANCSHARS CA increased its bottom line by earning $0.49 versus $0.41 in the prior year.

You can view the full analysis from the report here: United Security Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

At the close, DNB Financial ( DNBF) was up $1.65 (7.8%) to $22.90 on light volume. Throughout the day, 136 shares of DNB Financial exchanged hands as compared to its average daily volume of 1,500 shares. The stock ranged in a price between $22.90-$22.90 after having opened the day at $22.90 as compared to the previous trading day's close of $21.25.

DNB Financial Corporation operates as the bank holding company for DNB First, National Association that provides a range of commercial banking products and services to individuals and small to medium sized businesses in southeastern Pennsylvania. DNB Financial has a market cap of $59.4 million and is part of the financial sector. Shares are up 3.6% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates DNB Financial a buy, no analysts rate it a sell, and none rate it a hold.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates DNB Financial as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from TheStreet Ratings analysis on DNBF go as follows:

  • DNBF's revenue growth has slightly outpaced the industry average of 2.4%. Since the same quarter one year prior, revenues slightly increased by 0.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • DNB FINANCIAL CORP's earnings per share declined by 14.6% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, DNB FINANCIAL CORP reported lower earnings of $1.36 versus $1.80 in the prior year. This year, the market expects an improvement in earnings ($1.78 versus $1.36).
  • The gross profit margin for DNB FINANCIAL CORP is currently very high, coming in at 85.76%. Regardless of DNBF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DNBF's net profit margin of 14.29% is significantly lower than the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Commercial Banks industry. The net income has decreased by 14.6% when compared to the same quarter one year ago, dropping from $1.18 million to $1.00 million.

You can view the full analysis from the report here: DNB Financial Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

QC Holdings ( QCCO) was another company that pushed the Banking industry higher today. QC Holdings was up $0.04 (1.8%) to $2.28 on light volume. Throughout the day, 3,205 shares of QC Holdings exchanged hands as compared to its average daily volume of 13,100 shares. The stock ranged in a price between $2.24-$2.28 after having opened the day at $2.24 as compared to the previous trading day's close of $2.24.

QC Holdings, Inc. and its subsidiaries provide various financial services. The company operates in three segments: Branch Lending, Centralized Lending, and E-Lending. QC Holdings has a market cap of $38.3 million and is part of the financial sector. Shares are up 22.4% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate QC Holdings a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates QC Holdings as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on QCCO go as follows:

  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Consumer Finance industry and the overall market, QC HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • QCCO has underperformed the S&P 500 Index, declining 24.42% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • QC HOLDINGS INC has improved earnings per share by 20.0% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, QC HOLDINGS INC swung to a loss, reporting -$0.49 versus $0.49 in the prior year.
  • 36.82% is the gross profit margin for QC HOLDINGS INC which we consider to be strong. Regardless of QCCO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.24% trails the industry average.
  • QCCO's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.32, which clearly demonstrates the ability to cover short-term cash needs.

You can view the full analysis from the report here: QC Holdings Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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