Contrasting Heritage Financial (NASDAQ:HFWA) & Citizens Community Bancorp (NASDAQ:CZWI)

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

Analyst Recommendations

This is a breakdown of current ratings for Heritage Financial and Citizens Community Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Heritage Financial	0	3	3	0	2.50
Citizens Community Bancorp	0	1	1	0	2.50

Heritage Financial presently has a consensus target price of $30.50, indicating a potential upside of 10.39%. Given Heritage Financial’s higher probable upside, equities research analysts plainly believe Heritage Financial is more favorable than Citizens Community Bancorp.

Valuation and Earnings

This table compares Heritage Financial and Citizens Community Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Heritage Financial	$266.46 million	4.26	$67.53 million	$2.04	13.54
Citizens Community Bancorp	$98.77 million	2.03	$14.42 million	$1.46	14.26

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

Institutional & Insider Ownership

78.3% of Heritage Financial shares are owned by institutional investors. Comparatively, 55.1% of Citizens Community Bancorp shares are owned by institutional investors. 1.5% of Heritage Financial shares are owned by insiders. Comparatively, 3.9% of Citizens Community Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Heritage Financial pays an annual dividend of $0.96 per share and has a dividend yield of 3.5%. Citizens Community Bancorp pays an annual dividend of $0.42 per share and has a dividend yield of 2.0%. Heritage Financial pays out 47.1% of its earnings in the form of a dividend. Citizens Community Bancorp pays out 28.8% 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. Heritage Financial has increased its dividend for 14 consecutive years and Citizens Community Bancorp has increased its dividend for 6 consecutive years. Heritage Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Heritage Financial	20.50%	8.71%	1.13%
Citizens Community Bancorp	15.02%	8.05%	0.86%

Risk and Volatility

Heritage Financial has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500. Comparatively, Citizens Community Bancorp has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500.

Summary

Heritage Financial beats Citizens Community Bancorp on 12 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 small and medium sized businesses and individuals in the United States. It accepts various deposit products, such as noninterest demand deposits, interest bearing demand deposits, money market accounts, savings accounts, personal checking accounts, and certificates of deposit. The company’s 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, commercial business loans, lines of credit, term equipment financing, and term real estate loans, as well as commercial business loans to a range of businesses in industries that include real estate and rental and leasing, healthcare, accommodation and food services, retail trade, and construction. It also originates loans that are guaranteed by the U.S. Small Business Administration; and provides objective advice from trusted advisers. 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 1927 and is headquartered in Olympia, Washington.

About Citizens Community Bancorp

Citizens Community Bancorp, Inc. operates as a bank holding company for Citizens Community Federal N.A. that provides various traditional community banking services to businesses, agricultural operators, and consumers. It accepts various deposit products, including demand deposits, savings and money market accounts, and certificates of deposit. The company also offers various loan products, such as commercial real estate, commercial and industrial, agricultural real estate, agricultural operating, and consumer loans; and one-to-four family residential mortgages and home equity lines-of-credit. In addition, it maintains a portfolio of investments comprising mortgage-backed, corporate asset-backed, U.S. Government sponsored agency, and corporate debt securities. Citizens Community Bancorp, Inc. was founded in 1938 and is based in Eau Claire, Wisconsin.