Inter & Co. Inc. (NASDAQ:INTR) and Heritage Financial (NASDAQ:HFWA) Critical Survey

Inter & Co. Inc. (NASDAQ:INTR) and Heritage Financial (NASDAQ:HFWA) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, analyst recommendations and dividends.

Volatility & Risk

Inter & Co. Inc. has a beta of 0.94, indicating that its share price is 6% 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.

Valuation & Earnings

This table compares Inter & Co. Inc. and Heritage Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Inter & Co. Inc.	$1.93 billion	1.26	$235.05 million	$0.66	8.31
Heritage Financial	$335.97 million	3.43	$67.53 million	$2.10	13.41

Inter & Co. Inc. has higher revenue and earnings than Heritage Financial. Inter & Co. Inc. 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

Inter & Co. Inc. pays an annual dividend of $0.11 per share and has a dividend yield of 2.0%. Heritage Financial pays an annual dividend of $1.00 per share and has a dividend yield of 3.5%. Inter & Co. Inc. pays out 16.7% of its earnings in the form of a dividend. Heritage Financial pays out 47.6% 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. Heritage Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Inter & Co. Inc. and Heritage Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Inter & Co. Inc.	11.23%	14.94%	1.57%
Heritage Financial	20.44%	8.78%	1.15%

Institutional and Insider Ownership

22.9% of Inter & Co. Inc. shares are held by institutional investors. Comparatively, 78.3% of Heritage Financial shares are held by institutional investors. 1.5% of Heritage Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Inter & Co. Inc. and Heritage Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Inter & Co. Inc.	0	3	3	0	2.50
Heritage Financial	1	2	4	0	2.43

Inter & Co. Inc. presently has a consensus price target of $9.16, indicating a potential upside of 67.00%. Heritage Financial has a consensus price target of $32.67, indicating a potential upside of 15.96%. Given Inter & Co. Inc.’s stronger consensus rating and higher possible upside, research analysts clearly believe Inter & Co. Inc. is more favorable than Heritage Financial.

Summary

Heritage Financial beats Inter & Co. Inc. on 9 of the 17 factors compared between the two stocks.

About Inter & Co. Inc.

Inter & Co., Inc. Is a holding company, which engages in the provision of financial products and services. It operates through the following segments: Banking, Securities, Insurance Brokerage, Marketplace, Asset Management, Service, and Other. The Banking segment offers checking accounts cards, deposits, loans and advances, and other services through mobile application. The Securities segment is involved in the acquisition, sale and custody of securities, the structuring and distribution of securities in the capital market, and the provision of administration services to investment funds. The Insurance Brokerage segment includes insurance products underwritten by insurance companies, such as warranties, life, property and automobile insurance, and pension products, as well as consortium products provided by a third party. The Marketplace segment operates a digital platform, which offers goods and services to its customers. The Asset Management segment is composed of the operations related to the management of fund portfolios and other assets. The Service segment consists of collection and management of personal information, development and licensing of customized computer programs, development and licensing of non-customized computer programs and technical support, maintenance, and other information technology services. The company was founded on January 26, 2021 and is headquartered in Belo Horizonte, Brazil.

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.