Direct payroll costs, its largest expense, grew only 35.92%. This shows that the company is growing while still maintaining positive margins during this growth. Gross margin grew 26.75% in this time period. This growth was achieved by gaining new customers and having a strong retention rate. Going forward, if the company can continue this momentum, it could become a growth story for years to come.
United Financial Bancorp – Key information
United Financial Bancorp, Inc. (NASDAQ:UBNK) has traded relatively flat over the past year. It currently trades close to its 52-week high of $16.32 per share. It has a dividend yield of 2.8%.
The company has trumped analyst forecasts for earnings per share in three of the last four quarters. The company has grown 22% per year on average over the past five years. The growth forecast for the next five years is 15% per year on average.
For the quarter ending in March 2013, the company’s 10-Q provided some great information. Total assets grew about 1% in the period due to growing net loans and deposits. The largest growth in loans came from construction loans, as those increased by over 20% from last year. A continued improvement in the residential and commercial real estate market could further fuel this growth.
With the growth in interest income in March 2013 of $7.4 million, the company had a much stronger quarter in earnings per share compared to March 2012. Interest and dividends in commercial real estate grew an astounding 68.4%. Going forward, continued growth in this pocket is the key to continued strong performance. Otherwise, finding a different sector that can produce this kind of growth could be another great source of income. Successfully managing its portfolio of loans and finding new opportunities are challenges the company must face.
Conclusion
I would look to purchase a balanced portfolio of all three of these stocks here, in a modest investment. While the stronger performance of SCBT Financial Corporation (NASDAQ:SCBT) and Barrett over the past year tempts me to only like those two, I know that past results are not necessarily indicative of future returns.
The fundamentals of these companies are sound, and they are all experiencing solid to astounding growth in their respective industries. This growth can be seen in specific niche areas that they operate in.
The fact that all three of these stocks pay a dividend, in addition to the fact that they are small cap stocks, intrigues me. I think they are worth a modest investment here as these look to be the type of companies that could continue to grow over the long-term.
The article Fast Growing, Dividend Paying Small Caps originally appeared on Fool.com and is written by Anthony Parsons.
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