Contrasting WSFS Financial (NASDAQ:WSFS) & Heritage Financial (NASDAQ:HFWA)

WSFS Financial (NASDAQ:WSFS) and Heritage Financial (NASDAQ:HFWA) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, risk and valuation.

Institutional and Insider Ownership

88.5% of WSFS Financial shares are held by institutional investors. Comparatively, 78.3% of Heritage Financial shares are held by institutional investors. 1.1% of WSFS Financial shares are held by company insiders. Comparatively, 1.5% of Heritage Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for WSFS Financial and Heritage Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WSFS Financial	0	4	4	0	2.50
Heritage Financial	1	2	3	0	2.33

WSFS Financial currently has a consensus price target of $77.07, indicating a potential upside of 7.49%. Heritage Financial has a consensus price target of $30.50, indicating a potential upside of 10.83%. Given Heritage Financial’s higher possible upside, analysts clearly believe Heritage Financial is more favorable than WSFS Financial.

Risk and Volatility

WSFS Financial has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500. Comparatively, Heritage Financial has a beta of 0.5, indicating that its share price is 50% less volatile than the S&P 500.

Profitability

This table compares WSFS Financial and Heritage Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WSFS Financial	22.55%	11.23%	1.43%
Heritage Financial	20.50%	8.71%	1.13%

Valuation & Earnings

This table compares WSFS Financial and Heritage Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WSFS Financial	$1.36 billion	2.74	$287.35 million	$5.62	12.76
Heritage Financial	$335.97 million	3.37	$67.53 million	$2.04	13.49

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

Dividends

WSFS Financial pays an annual dividend of $0.68 per share and has a dividend yield of 0.9%. Heritage Financial pays an annual dividend of $0.96 per share and has a dividend yield of 3.5%. WSFS Financial pays out 12.1% of its earnings in the form of a dividend. Heritage Financial pays out 47.1% 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. WSFS Financial has increased its dividend for 1 consecutive years and Heritage Financial has increased its dividend for 14 consecutive years. Heritage Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

WSFS Financial beats Heritage Financial on 11 of the 17 factors compared between the two stocks.

About WSFS Financial

WSFS Financial Corporation operates as the savings and loan holding company for the Wilmington Savings Fund Society, FSB that provides various banking services in the United States. It operates through three segments: WSFS Bank, Cash Connect, and Wealth Management. It offers various deposit products, including savings accounts, demand deposits, interest-bearing demand deposits, money market deposit accounts, and certificates of deposit, as well as accepts jumbo certificates of deposit from individuals, businesses, and municipalities. The company also provides a range of loans, which comprise fixed and adjustable rate residential loans; commercial mortgage and commercial loans; commercial construction loans; commercial loans for working capital, financing equipment and real estate acquisitions, business expansion and other business purposes; and consumer credit products, such as home equity loans, home equity lines of credit, automobile loans, unsecured lines of credit, and other secured and unsecured personal installment loans. In addition, it offers insurance products; planning and advisory services, investment management, trust services, and credit and deposit products to individual, corporate and institutional clients; retail securities and insurance brokerage services; mortgage and title services; residential mortgage and refinancing solutions; and leases small equipment and fixed assets, as well as provides financial planning, customized investment strategies, brokerage products, fiduciary, and wealth management services. Further, the company provides ATM vault cash, smart safe, and other cash logistics services; and online reporting and ATM cash management, predictive cash ordering and reconcilement services, armored carrier management, loss protection, and deposit safe cash logistics services, as well as trustee, agency, bankruptcy administration, custodial and commercial domicile services. The company was founded in 1832 and is based in Wilmington, Delaware.

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.