Head-To-Head Contrast: Washington Banking (WBCO) and Heritage Commerce (HTBK)

Washington Banking (NASDAQ: WBCO) and Heritage Commerce (NASDAQ:HTBK) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, earnings, risk, analyst recommendations, institutional ownership, dividends and valuation.

Institutional and Insider Ownership

70.0% of Heritage Commerce shares are owned by institutional investors. 5.7% of Heritage Commerce shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Washington Banking N/A N/A N/A
Heritage Commerce 29.82% 12.64% 1.23%

Dividends

Heritage Commerce pays an annual dividend of $0.40 per share and has a dividend yield of 2.4%. Washington Banking does not pay a dividend. Heritage Commerce pays out 51.9% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Washington Banking and Heritage Commerce, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Washington Banking 0 0 0 0 N/A
Heritage Commerce 0 1 1 0 2.50

Heritage Commerce has a consensus target price of $16.50, suggesting a potential upside of 0.12%.

Valuation & Earnings

This table compares Washington Banking and Heritage Commerce’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Washington Banking N/A N/A N/A N/A N/A
Heritage Commerce $106.06 million 5.94 $27.38 million $0.77 21.40

Heritage Commerce has higher revenue and earnings than Washington Banking.

Summary

Heritage Commerce beats Washington Banking on 8 of the 9 factors compared between the two stocks.

Washington Banking Company Profile

Washington Banking Company is a bank holding company. The Company’s primary business is conducted by its wholly owned subsidiary, Whidbey Island Bank (the Bank). The business of the Bank, which is focused in the northern area of Western Washington, consists primarily of attracting deposits from the general public and originating loans. Whidbey Island Bank conducts a full-service, community, commercial banking business. The Bank also offers nondeposit managed investment products and services, which are not Federal Deposit Insurance Corporation (FDIC) insured. These programs are provided through the investment advisory companies Elliott Cove Capital Management LLC and DFC Services & DFC Insurance Services. Another nondeposit product offered through the Bank, which is not FDIC insured, is a sweep investment option available through a brokerage account.

Heritage Commerce Company Profile

Heritage Commerce Corp is a bank holding company. The Company, through its subsidiary Heritage Bank of Commerce (the Bank), provides a range of banking services. The Bank is a California state-chartered multi-community independent bank that offers a range of commercial banking services to small and medium-sized businesses and their owners, managers and employees. As of December 31, 2016, the Company operated through 11 service branch offices located 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. The Company’s subsidiary, CSNK Working Capital Finance Corp., doing business as Bay View Funding, provides business-essential working capital factoring financing to various industries across the United States. As of December 31, 2016, the Bank operated automated teller machines (ATMs) at five different locations.

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