Heritage Financial (HFWA) vs. FS Bancorp (FSBW) Head to Head Survey

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Heritage Financial and FS Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Heritage Financial 0 0 5 0 3.00
FS Bancorp 0 1 0 0 2.00

Heritage Financial currently has a consensus price target of $35.00, suggesting a potential upside of 4.63%. FS Bancorp has a consensus price target of $52.00, suggesting a potential downside of 13.01%. Given Heritage Financial’s stronger consensus rating and higher possible upside, equities analysts plainly believe Heritage Financial is more favorable than FS Bancorp.


Heritage Financial pays an annual dividend of $0.60 per share and has a dividend yield of 1.8%. FS Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 0.9%. Heritage Financial pays out 40.5% of its earnings in the form of a dividend. FS Bancorp pays out 13.4% 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.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Heritage Financial $183.29 million 6.21 $41.79 million $1.48 22.60
FS Bancorp $70.25 million 3.15 $14.08 million $4.17 14.34

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


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

Net Margins Return on Equity Return on Assets
Heritage Financial 20.10% 9.09% 1.16%
FS Bancorp 21.72% 13.57% 1.56%

Risk & Volatility

Heritage Financial has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500. Comparatively, FS Bancorp has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500.

Insider and Institutional Ownership

77.1% of Heritage Financial shares are held by institutional investors. Comparatively, 52.5% of FS Bancorp shares are held by institutional investors. 1.8% of Heritage Financial shares are held by insiders. Comparatively, 11.6% of FS Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.


Heritage Financial beats FS Bancorp on 10 of the 16 factors compared between the two stocks.

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.

About FS Bancorp

FS Bancorp, Inc. operates as a bank holding company for 1st Security Bank of Washington that provides banking and financial services to local families, local and regional businesses, and industry niches. The company operates in two segments, Commercial and Consumer Banking; and Home Lending. It offers various deposit instruments, including checking accounts, money market deposit accounts, savings accounts, and certificates of deposits. The company provides one-to-four-family residential first mortgages, second mortgage/home equity loan products, non-mortgage commercial business loans, commercial real estate loans, and construction and development loans, as well as consumer loans, which primarily include personal lines of credit, automobile, direct home improvement, loans on deposit, and recreational loans. As of March 27, 2018, it operated 11 branches and 7 loan production offices in various suburban communities in the greater Puget Sound area, and 1 loan production office in the market area of the Tri-Cities. The company was founded in 1936 and is based in Mountlake Terrace, Washington.

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