Heritage Commerce (NASDAQ:HTBK) versus Fidelity D&D Bancorp (NASDAQ:FDBC) Financial Contrast

Heritage Commerce (NASDAQ:HTBK) and Fidelity D&D Bancorp (NASDAQ:FDBC) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Valuation and Earnings

This table compares Heritage Commerce and Fidelity D&D Bancorp”s gross revenue, earnings per share (EPS) 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
Fidelity D&D Bancorp	$98.01 million	3.28	$28.20 million	$5.25	10.54

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

Risk and Volatility

Heritage Commerce has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500. Comparatively, Fidelity D&D Bancorp has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500.

Institutional and Insider Ownership

75.6% of Heritage Commerce shares are held by institutional investors. Comparatively, 20.0% of Fidelity D&D Bancorp shares are held by institutional investors. 2.7% of Heritage Commerce shares are held by insiders. Comparatively, 20.7% of Fidelity D&D Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Heritage Commerce pays an annual dividend of $0.52 per share and has a dividend yield of 3.9%. Fidelity D&D Bancorp pays an annual dividend of $1.72 per share and has a dividend yield of 3.1%. Heritage Commerce pays out 66.7% of its earnings in the form of a dividend. Fidelity D&D Bancorp pays out 32.8% 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. Fidelity D&D Bancorp has raised its dividend for 10 consecutive years.

Profitability

This table compares Heritage Commerce and Fidelity D&D Bancorp’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%
Fidelity D&D Bancorp	21.12%	12.67%	1.08%

Analyst Ratings

This is a breakdown of current ratings and price targets for Heritage Commerce and Fidelity D&D Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Heritage Commerce	0	5	2	0	2.29
Fidelity D&D Bancorp	0	0	1	0	3.00

Heritage Commerce presently has a consensus target price of $13.12, indicating a potential downside of 2.42%. Given Heritage Commerce’s higher possible upside, analysts clearly believe Heritage Commerce is more favorable than Fidelity D&D Bancorp.

Summary

Fidelity D&D Bancorp beats Heritage Commerce on 9 of the 17 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 Fidelity D&D Bancorp

Fidelity D&D Bancorp, Inc. is a holding company, which engages in the provision of commercial banking services. It operates through the following segments: Commercial and Industrial, Commercial Real Estate, Consumer, and Residential Real Estate. The Commercial and Industrial segment refers to identified historic and/or the projected cash flows of the borrower and secondarily to the underlying collateral provided by the borrower. The Commercial Real Estate segment offers finances purchase of real estate, refinance existing obligations, and/or to provide capital. The Consumer segment includes home equity installment loans and lines of credit. The Residential Real Estate segment operates as a secured first lien position of the borrower’s residential real estate. The company was founded in 1902 and is headquartered in Dunmore, PA.