Heritage Financial (HFWA) vs. The Competition Financial Review

Heritage Financial (NASDAQ:HFWA) is one of 919 public companies in the “Banks” industry, but how does it weigh in compared to its rivals? We will compare Heritage Financial to similar businesses based on the strength of its earnings, institutional ownership, valuation, analyst recommendations, dividends, profitability and risk.

Risk and Volatility

Heritage Financial has a beta of 0.53, suggesting that its share price is 47% less volatile than the S&P 500. Comparatively, Heritage Financial’s rivals have a beta of 0.61, suggesting that their average share price is 39% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Heritage Financial and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Heritage Financial	0	4	4	0	2.50
Heritage Financial Competitors	7470	30200	27770	1466	2.35

Heritage Financial presently has a consensus price target of $32.67, suggesting a potential upside of 14.38%. As a group, “Banks” companies have a potential upside of 16.39%. Given Heritage Financial’s rivals higher possible upside, analysts clearly believe Heritage Financial has less favorable growth aspects than its rivals.

Profitability

This table compares Heritage Financial and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Heritage Financial	19.24%	8.70%	1.14%
Heritage Financial Competitors	15.64%	9.43%	0.93%

Dividends

Heritage Financial pays an annual dividend of $1.00 per share and has a dividend yield of 3.5%. Heritage Financial pays out 49.8% of its earnings in the form of a dividend. As a group, “Banks” companies pay a dividend yield of 9.3% and pay out 28.9% of their earnings in the form of a dividend. Heritage Financial has increased its dividend for 14 consecutive years. Heritage Financial lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Valuation & Earnings

This table compares Heritage Financial and its rivals revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Heritage Financial	$335.97 million	$67.53 million	14.21
Heritage Financial Competitors	$14.17 billion	$2.42 billion	20.08

Heritage Financial’s rivals have higher revenue and earnings than Heritage Financial. Heritage Financial is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Institutional & Insider Ownership

78.3% of Heritage Financial shares are held by institutional investors. Comparatively, 48.0% of shares of all “Banks” companies are held by institutional investors. 1.5% of Heritage Financial shares are held by insiders. Comparatively, 9.8% of shares of all “Banks” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Heritage Financial rivals beat Heritage Financial on 10 of the 15 factors compared.

Heritage Financial Company Profile

Heritage Financial Corporation operates as the bank holding company for Heritage Bank that provides various financial services to small and medium sized businesses and individuals in the United States. It accepts various deposit products, such as noninterest demand deposits, interest bearing demand deposits, money market accounts, savings accounts, personal checking accounts, and certificates of deposit. The company’s loan portfolio includes commercial and industrial loans, owner-occupied and non-owner occupied commercial real estate loans, one-to-four family residential loans, real estate construction and land development loans, consumer loans, commercial business loans, lines of credit, term equipment financing, and term real estate loans, as well as commercial business loans to a range of businesses in industries that include real estate and rental and leasing, healthcare, accommodation and food services, retail trade, and construction. It also originates loans that are guaranteed by the U.S. Small Business Administration; and provides objective advice from trusted advisers. The company was formerly known as Heritage Financial Corporation, M.H.C. and changed its name to Heritage Financial Corporation in 1998. Heritage Financial Corporation was founded in 1927 and is headquartered in Olympia, Washington.