Seacoast Banking Corporation of Florida (NASDAQ:SBCF) versus Heritage Financial (NASDAQ:HFWA) Financial Review

Heritage Financial (NASDAQ:HFWA) and Seacoast Banking Corporation of Florida (NASDAQ:SBCF) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Valuation & Earnings

This table compares Heritage Financial and Seacoast Banking Corporation of Florida”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Heritage Financial	$335.97 million	3.46	$67.53 million	$2.10	13.53
Seacoast Banking Corporation of Florida	$935.52 million	3.50	$144.88 million	$1.57	21.57

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

Profitability

This table compares Heritage Financial and Seacoast Banking Corporation of Florida’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Heritage Financial	20.44%	8.78%	1.15%
Seacoast Banking Corporation of Florida	15.11%	8.68%	1.14%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Heritage Financial and Seacoast Banking Corporation of Florida, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Heritage Financial	0	3	3	0	2.50
Seacoast Banking Corporation of Florida	0	2	3	0	2.60

Heritage Financial currently has a consensus price target of $32.50, suggesting a potential upside of 14.40%. Seacoast Banking Corporation of Florida has a consensus price target of $35.50, suggesting a potential upside of 4.84%. Given Heritage Financial’s higher probable upside, research analysts plainly believe Heritage Financial is more favorable than Seacoast Banking Corporation of Florida.

Institutional & Insider Ownership

78.3% of Heritage Financial shares are owned by institutional investors. Comparatively, 81.8% of Seacoast Banking Corporation of Florida shares are owned by institutional investors. 1.5% of Heritage Financial shares are owned by company insiders. Comparatively, 1.5% of Seacoast Banking Corporation of Florida shares are owned by company 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.

Dividends

Heritage Financial pays an annual dividend of $1.00 per share and has a dividend yield of 3.5%. Seacoast Banking Corporation of Florida pays an annual dividend of $0.76 per share and has a dividend yield of 2.2%. Heritage Financial pays out 47.6% of its earnings in the form of a dividend. Seacoast Banking Corporation of Florida pays out 48.4% 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. Heritage Financial has increased its dividend for 14 consecutive years and Seacoast Banking Corporation of Florida has increased its dividend for 4 consecutive years. Heritage Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Heritage Financial has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500. Comparatively, Seacoast Banking Corporation of Florida has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500.

About Heritage Financial

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.

About Seacoast Banking Corporation of Florida

Seacoast Banking Corp. of Florida is a financial holding company, which engages in the provision of integrated financial services. It provides banking and investment services to businesses and consumers, including personal and business deposit products, Internet and mobile banking, personal, commercial and mortgage loans, wealth management services, and treasury management solutions. The company was founded in 1983 and is headquartered in Stuart, FL.