Heritage Commerce (HTBK) & Enterprise Bancorp (EBTC) Head to Head Analysis

Heritage Commerce (NASDAQ: HTBK) and Enterprise Bancorp (NASDAQ:EBTC) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, valuation, profitability, analyst recommendations, dividends, earnings and institutional ownership.

Dividends

Heritage Commerce pays an annual dividend of $0.44 per share and has a dividend yield of 2.6%. Enterprise Bancorp pays an annual dividend of $0.58 per share and has a dividend yield of 1.4%. Heritage Commerce pays out 55.0% of its earnings in the form of a dividend.

Risk & Volatility

Heritage Commerce has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500. Comparatively, Enterprise Bancorp has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Heritage Commerce 21.93% 12.22% 1.18%
Enterprise Bancorp 16.55% 11.03% 0.92%

Earnings and Valuation

This table compares Heritage Commerce and Enterprise Bancorp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Heritage Commerce $116.52 million 5.88 $23.82 million $0.80 21.31
Enterprise Bancorp $120.71 million 3.95 $19.39 million N/A N/A

Heritage Commerce has higher earnings, but lower revenue than Enterprise Bancorp.

Analyst Recommendations

This is a summary of current ratings and price targets for Heritage Commerce and Enterprise Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Heritage Commerce 0 0 3 0 3.00
Enterprise Bancorp 0 0 0 0 N/A

Heritage Commerce presently has a consensus price target of $18.25, indicating a potential upside of 7.04%. Given Heritage Commerce’s higher probable upside, research analysts clearly believe Heritage Commerce is more favorable than Enterprise Bancorp.

Institutional & Insider Ownership

69.1% of Heritage Commerce shares are owned by institutional investors. Comparatively, 20.2% of Enterprise Bancorp shares are owned by institutional investors. 5.4% of Heritage Commerce shares are owned by insiders. Comparatively, 19.0% of Enterprise Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Heritage Commerce beats Enterprise Bancorp on 10 of the 14 factors compared between the two stocks.

About Heritage Commerce

Heritage Commerce Corp operates as the bank holding company for Heritage Bank of Commerce that provides various commercial and personal banking services to residents and the business/professional community in California. It offers a range of deposit products for business banking and retail markets, including interest and non-interest bearing demand, savings accounts, certificate of deposit, money market accounts, and time deposits. The company also provides various loan products comprising commercial loans, such as operating secured and unsecured loans advanced for working capital, equipment purchases, and other business purposes; commercial real estate loans; commercial construction loans for rental properties, commercial buildings, and homes; home equity lines of credit; consumer loans consisting of loans for financing automobiles, various consumer goods, and other personal purposes; and small business administration loans. In addition, it offers other banking services, including cashier's checks, bank-by-mail, ATMs, night depositories, safe deposit boxes, direct deposit, automated payroll, electronic funds transfer, online banking, online bill pay, homeowner association, remote deposit capture, automated clearing house origination, electronic data interchange, and check imaging services, as well as other customary banking and factoring financing services. The company provides its banking products and services through 11 full service branch offices in the southern and eastern regions of the general San Francisco Bay Area of California in the counties of Santa Clara, Alameda, Contra Costa, and San Benito. Heritage Commerce Corp was founded in 1997 and is based in San Jose, California.

About Enterprise Bancorp

Enterprise Bancorp, Inc. operates as the holding company for Enterprise Bank and Trust Company that provides various banking products and services primarily in the greater Merrimack Valley and North Central regions of Massachusetts and Southern New Hampshire. The company offers commercial checking, business and municipal savings accounts, term certificates of deposit, money market and business sweep accounts, interest on lawyers trust accounts, escrow management accounts, personal checking accounts, savings accounts, and individual retirement accounts, as well as checking and simplified employee pension accounts. It also provides commercial mortgage loans, construction and land development loans, secured and unsecured commercial loans and lines of credit, and letters of credit; and conventional residential mortgage loans, home equity loans and lines, residential construction loans on primary and secondary residences, and secured and unsecured personal loans and lines of credit, as well as equipment lease financing services. In addition, the company offers cash management services; various investment advisory and management services, including customized investment management and trust services to individuals, family groups, commercial businesses, trusts, foundations, non-profit organizations, and endowments; and insurance products, such as property and casualty, employee benefits, and risk-management solutions. As of January 25, 2018, it had 24 full-service branches located in the Massachusetts communities of Lowell, Acton, Andover, Billerica, Chelmsford, Dracut, Fitchburg, Lawrence, Leominster, Methuen, Tewksbury, Tyngsborough, and Westford; and the New Hampshire communities of Derry, Hudson, Nashua, Pelham, Salem, and Windham. The company primarily serves business entities, non-profit organizations, professionals, and individuals. Enterprise Bancorp, Inc. was founded in 1989 and is headquartered in Lowell, Massachusetts.

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