Heritage Commerce (NASDAQ:HTBK) & Fvcbankcorp (NASDAQ:FVCB) Critical Survey

Heritage Commerce (NASDAQ:HTBK) and Fvcbankcorp (NASDAQ:FVCB) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, institutional ownership, profitability and earnings.

Earnings & Valuation

This table compares Heritage Commerce and Fvcbankcorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Heritage Commerce	$197.46 million	4.20	$47.83 million	$0.78	17.24
Fvcbankcorp	$122.03 million	2.60	$22.06 million	$1.42	12.40

Heritage Commerce has higher revenue and earnings than Fvcbankcorp. Fvcbankcorp is trading at a lower price-to-earnings ratio than Heritage Commerce, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Heritage Commerce and Fvcbankcorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Heritage Commerce	17.77%	8.07%	1.01%
Fvcbankcorp	20.45%	9.80%	1.08%

Volatility & Risk

Heritage Commerce has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500. Comparatively, Fvcbankcorp has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500.

Dividends

Heritage Commerce pays an annual dividend of $0.52 per share and has a dividend yield of 3.9%. Fvcbankcorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.6%. Heritage Commerce pays out 66.7% of its earnings in the form of a dividend. Fvcbankcorp pays out 19.7% 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.

Analyst Ratings

This is a breakdown of current recommendations for Heritage Commerce and Fvcbankcorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Heritage Commerce	0	5	2	0	2.29
Fvcbankcorp	0	0	2	0	3.00

Heritage Commerce presently has a consensus target price of $13.12, indicating a potential downside of 2.42%. Fvcbankcorp has a consensus target price of $21.00, indicating a potential upside of 19.25%. Given Fvcbankcorp’s stronger consensus rating and higher probable upside, analysts plainly believe Fvcbankcorp is more favorable than Heritage Commerce.

Insider & Institutional Ownership

75.6% of Heritage Commerce shares are held by institutional investors. Comparatively, 43.6% of Fvcbankcorp shares are held by institutional investors. 2.7% of Heritage Commerce shares are held by insiders. Comparatively, 11.2% of Fvcbankcorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Fvcbankcorp beats Heritage Commerce on 8 of the 15 factors compared between the two stocks.

About Heritage Commerce

Heritage Commerce Corp operates as the bank holding company for Heritage Bank of Commerce that provides various commercial and personal banking services to residents and the business/professional community in California. Its deposit products for business banking and retail markets include interest and non-interest-bearing demand, savings, and money market accounts, as well as certificates of deposit and time deposits. The company’s loan portfolio comprises commercial loans, such as operating secured and unsecured loans advanced for working capital, equipment purchases, and other business purposes; commercial real estate loans; commercial construction loans for rental properties, commercial buildings, and homes; small business administration loans; home equity lines of credit; multifamily loans on residential properties; residential mortgage loans; and consumer loans consisting of loans for financing automobiles, various consumer goods, and other personal purposes. In addition, it offers other banking services, including cashier’s checks, bank by mail, night depositories, safe deposit boxes, direct deposit, automated payroll, electronic funds transfer, online bill pay, homeowner association, remote deposit capture, automated clearing house origination, electronic data interchange, and check imaging services, as well as other customary banking, factoring financing, and electronic banking services. Heritage Commerce Corp was founded in 1994 and is headquartered in San Jose, California.

About Fvcbankcorp

FVCBankcorp, Inc. operates as the bank holding company for FVCbank that provides various banking products and services in Virginia. It offers deposit products, including interest and noninterest-bearing transaction accounts, savings accounts, money market accounts, and certificates of deposit. The company also provides commercial real estate loans; commercial construction loans; commercial loans for various business purposes, such as for working capital, equipment purchases, lines of credit, and government contract financing; small business administration loans; asset-based loans and accounts receivable financing; home equity loans; and consumer loans. In addition, it offers business and consumer credit cards; merchant services; business insurance products; and online banking, remote deposit, and mobile banking services. The company serves commercial businesses, nonprofit organizations, professional service entities, and their respective owners and employees located in the greater Washington, D.C., and Baltimore metropolitan areas. It operates branch offices in Arlington, Virginia; the independent city of Manassas, Virginia; Reston, Fairfax County, Virginia; Springfield, Fairfax County in Virginia; and Montgomery County and Baltimore in Maryland, and Washington, D.C. FVCBankcorp, Inc. was founded in 2007 and is headquartered in Fairfax, Virginia.