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

Dividends

Heritage Financial pays an annual dividend of $0.60 per share and has a dividend yield of 1.8%. Entegra Financial does not pay a dividend. Heritage Financial pays out 40.5% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Entegra Financial and Heritage Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Entegra Financial 0 1 2 0 2.67
Heritage Financial 0 0 5 0 3.00

Entegra Financial presently has a consensus target price of $32.50, suggesting a potential upside of 15.04%. Heritage Financial has a consensus target price of $35.00, suggesting a potential upside of 5.42%. Given Entegra Financial’s higher probable upside, equities research analysts clearly believe Entegra Financial is more favorable than Heritage Financial.

Volatility & Risk

Entegra Financial has a beta of 0.25, suggesting that its stock price is 75% less volatile than the S&P 500. Comparatively, Heritage Financial has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Entegra Financial $56.49 million 3.45 $2.57 million $1.42 19.89
Heritage Financial $183.29 million 6.16 $41.79 million $1.48 22.43

Heritage Financial has higher revenue and earnings than Entegra Financial. Entegra 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.

Insider and Institutional Ownership

50.3% of Entegra Financial shares are held by institutional investors. Comparatively, 77.1% of Heritage Financial shares are held by institutional investors. 4.8% of Entegra Financial shares are held by company insiders. Comparatively, 2.7% 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.

Profitability

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

Net Margins Return on Equity Return on Assets
Entegra Financial 8.03% 7.90% 0.77%
Heritage Financial 20.10% 9.09% 1.16%

Summary

Heritage Financial beats Entegra Financial on 13 of the 16 factors compared between the two stocks.

About Entegra Financial

Entegra Financial Corp. operates as the bank holding company for Entegra Bank that provides various retail and commercial banking products and services in the United States. The company offers deposit accounts, including savings accounts, commercial and regular checking accounts, money market accounts, and individual retirement accounts, as well as certificates of deposit. It also provides commercial real estate loans, one-to-four family residential mortgage loans, commercial business loans, and home equity loans and lines of credit, as well as one-to four-family residential construction, other construction and land, and consumer loans. In addition, the company invests in securities, as well as provides wealth management services through a third party. As of January 18, 2018, it operated a network of 18 branches in the Western North Carolina counties of Cherokee, Haywood, Henderson, Jackson, Macon, Polk, and Transylvania; Upstate South Carolina counties of Anderson, Greenville, and Spartanburg; and Northern Georgia county of Pickens and Hall. The company also operated loan production offices in Asheville, North Carolina; Clemson, South Carolina; and Duluth, Georgia. The company was formerly known as Macon Financial Corp. and changed its name to Entegra Financial Corp. in 2014. Entegra Financial Corp. was founded in 1922 and is headquartered in Franklin, North Carolina.

About Heritage Financial

Heritage Financial Corporation operates as the bank holding company for Heritage Bank that provides various financial services to businesses and individuals in the United States. The company accepts various deposit products, such as noninterest demand accounts, interest bearing demand deposits, money market accounts, savings accounts, personal checking accounts, and certificates of deposit. Its 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, business lines of credit, term equipment financing, and term real estate loans, as well as commercial loans focuses on real estate related industries and businesses in agricultural, healthcare, legal, and other professions. The company also originates loans that are guaranteed by the U.S. Small Business Administration; and offers trust services through trust powers, as well as objective advice. As of December 31, 2017, the company had a network of 59 branches located in Washington and Oregon. 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 1994 and is headquartered in Olympia, Washington.

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