Head-To-Head Analysis: First Busey (NASDAQ:BUSE) and Heritage Commerce (NASDAQ:HTBK)

First Busey (NASDAQ:BUSE) and Heritage Commerce (NASDAQ:HTBK) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, valuation, risk and profitability.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Busey	21.13%	10.29%	1.38%
Heritage Commerce	17.77%	8.07%	1.01%

Dividends

First Busey pays an annual dividend of $1.04 per share and has a dividend yield of 3.6%. Heritage Commerce pays an annual dividend of $0.52 per share and has a dividend yield of 3.9%. First Busey pays out 42.4% of its earnings in the form of a dividend. Heritage Commerce pays out 66.7% 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. First Busey has raised its dividend for 10 consecutive years.

Institutional & Insider Ownership

56.5% of First Busey shares are owned by institutional investors. Comparatively, 75.6% of Heritage Commerce shares are owned by institutional investors. 3.8% of First Busey shares are owned by insiders. Comparatively, 2.7% of Heritage Commerce shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for First Busey and Heritage Commerce, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Busey	0	5	2	0	2.29
Heritage Commerce	0	5	1	0	2.17

First Busey currently has a consensus target price of $31.00, indicating a potential upside of 6.86%. Heritage Commerce has a consensus target price of $14.25, indicating a potential upside of 5.95%. Given First Busey’s stronger consensus rating and higher probable upside, equities analysts clearly believe First Busey is more favorable than Heritage Commerce.

Valuation and Earnings

This table compares First Busey and Heritage Commerce”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Busey	$1.04 billion	2.23	$135.26 million	$2.45	11.84
Heritage Commerce	$197.46 million	4.20	$47.83 million	$0.78	17.24

First Busey has higher revenue and earnings than Heritage Commerce. First Busey 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

First Busey has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, Heritage Commerce has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.

Summary

First Busey beats Heritage Commerce on 13 of the 17 factors compared between the two stocks.

About First Busey

First Busey Corporation is a financial holding company headquartered in Champaign, Illinois. Its principal subsidiary, Busey Bank, provides consumer and commercial banking services, including deposit accounts, loans, treasury management and mortgage services. The company also offers wealth management services, such as investment management, financial planning and trust services, through Busey Wealth Management. Its FirsTech business provides payment technology and processing services to businesses and organizations.

About Heritage Commerce

Heritage Commerce Corp. is a bank holding company that provides commercial banking services through its subsidiary, Heritage Bank of Commerce. The bank serves businesses, professionals, nonprofit organizations and individuals, with a focus on businesses in the San Francisco Bay Area and Silicon Valley. Its offerings include business checking and savings accounts, commercial real estate and business loans, lines of credit, and treasury management and cash-management services. The bank also provides consumer deposit accounts and other traditional banking services.