Analyzing Anchor Bancorp (ANCB) & Heritage Financial (HFWA)

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

Risk and Volatility

Anchor Bancorp has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, Heritage Financial has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Anchor Bancorp 3.89% 5.17% 0.73%
Heritage Financial 21.16% 8.90% 1.12%

Dividends

Heritage Financial pays an annual dividend of $0.60 per share and has a dividend yield of 1.9%. Anchor Bancorp does not pay a dividend. Heritage Financial pays out 43.2% of its earnings in the form of a dividend.

Insider and Institutional Ownership

44.7% of Anchor Bancorp shares are held by institutional investors. Comparatively, 73.4% of Heritage Financial shares are held by institutional investors. 5.6% of Anchor Bancorp shares are held by insiders. Comparatively, 2.7% of Heritage Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Anchor Bancorp and Heritage Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Anchor Bancorp 0 0 0 0 N/A
Heritage Financial 0 2 3 0 2.60

Heritage Financial has a consensus price target of $34.50, indicating a potential upside of 10.68%. Given Heritage Financial’s higher probable upside, analysts clearly believe Heritage Financial is more favorable than Anchor Bancorp.

Earnings and Valuation

This table compares Anchor Bancorp and Heritage Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Anchor Bancorp $24.54 million 2.51 $2.35 million $0.41 60.68
Heritage Financial $183.29 million 5.79 $38.79 million $1.39 22.42

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

Summary

Heritage Financial beats Anchor Bancorp on 11 of the 15 factors compared between the two stocks.

About Anchor Bancorp

Anchor Bancorp is the bank holding company of Anchor Bank (the Bank). The Bank is a community-based savings bank. As of June 30, 2016, the Bank primarily served Western Washington through its 10 full-service banking offices (including a Wal-Mart in-store location) located within Grays Harbor, Thurston, Lewis, Pierce and Mason counties, and a loan production office located in King County, Washington. It is in the business of attracting deposits from the public and utilizing those deposits to originate loans. The Bank offers a range of loan products. The Bank’s operations include commercial banking services, such as lending activities, deposit products and other cash management services. The Bank offers commercial real estate loans and multi-family loans primarily in Western Washington. The Bank offers various deposit instruments, including checking accounts, money market deposit accounts, savings accounts and certificates of deposit with a range of rates.

About Heritage Financial

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.

Receive News & Ratings for Anchor Bancorp Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Anchor Bancorp and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply