Heritage Financial Corporation (NASDAQ: HFWA) and F.N.B. Corporation (NYSE:FNB) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.

Earnings and Valuation

This table compares Heritage Financial Corporation and F.N.B. Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Heritage Financial Corporation $165.38 million 4.89 $41.69 million $1.40 19.39
F.N.B. Corporation $878.51 million 4.71 $252.12 million $0.78 16.40

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

Profitability

This table compares Heritage Financial Corporation and F.N.B. Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Heritage Financial Corporation 23.81% 8.56% 1.08%
F.N.B. Corporation 19.43% 6.97% 0.90%

Volatility and Risk

Heritage Financial Corporation has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500. Comparatively, F.N.B. Corporation has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Heritage Financial Corporation and F.N.B. Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Heritage Financial Corporation 0 2 0 0 2.00
F.N.B. Corporation 0 2 8 1 2.91

Heritage Financial Corporation presently has a consensus price target of $28.00, suggesting a potential upside of 3.13%. F.N.B. Corporation has a consensus price target of $17.50, suggesting a potential upside of 36.83%. Given F.N.B. Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe F.N.B. Corporation is more favorable than Heritage Financial Corporation.

Dividends

Heritage Financial Corporation pays an annual dividend of $0.52 per share and has a dividend yield of 1.9%. F.N.B. Corporation pays an annual dividend of $0.48 per share and has a dividend yield of 3.8%. Heritage Financial Corporation pays out 37.1% of its earnings in the form of a dividend. F.N.B. Corporation pays out 61.5% 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.

Institutional & Insider Ownership

75.9% of Heritage Financial Corporation shares are owned by institutional investors. Comparatively, 76.4% of F.N.B. Corporation shares are owned by institutional investors. 2.7% of Heritage Financial Corporation shares are owned by company insiders. Comparatively, 1.2% of F.N.B. Corporation shares are owned by company 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

F.N.B. Corporation beats Heritage Financial Corporation on 9 of the 17 factors compared between the two stocks.

About Heritage Financial Corporation

Heritage Financial Corporation is a bank holding company. The Company is engaged in the business of planning, directing and coordinating the business activities of its bank subsidiary, Heritage Bank (the Bank). The Bank’s lending activities focus on commercial business lending. The Bank also originates consumer loans, real estate construction and land development loans, and one- to four-family residential loans. The Bank’s investment securities available for sale include the United States treasury and the United States Government-sponsored agencies; municipal securities; mortgage-backed securities and collateralized mortgage obligations, which include residential and commercial; collateralized loan obligations; corporate obligations, and other securities. The Bank’s primary sources of funds are deposits and loan repayments. Borrowings are used on a short-term basis to compensate for reductions in other sources of funds, such as deposit inflows.

About F.N.B. Corporation

F.N.B. Corporation is a financial holding company. The Company operates through four segments: Community Banking, Wealth Management, Insurance and Consumer Finance. Its Community Banking segment consists of First National Bank of Pennsylvania (FNBPA), which offers services, including commercial and individual demand, savings and time deposit accounts and commercial, mortgage and individual installment loans. It operates its Community Banking business through a network of over 290 branches in Pennsylvania, Ohio, Maryland and West Virginia. Its Wealth Management segment delivers wealth management services to individuals, corporations and retirement funds, as well as existing customers of Community Banking. The Company’s Insurance segment operates principally through First National Insurance Agency, LLC (FNIA), which is a subsidiary of the Corporation. Its Consumer Finance segment operates through its subsidiary, Regency Finance Company. It also operates other non-banking subsidiaries.

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