Analyzing Heritage Financial (NASDAQ:HFWA) & Grupo Financiero Galicia (NASDAQ:GGAL)

Grupo Financiero Galicia (NASDAQ:GGAL) and Heritage Financial (NASDAQ:HFWA) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, risk, earnings, valuation, institutional ownership and dividends.

Analyst Recommendations

This is a summary of current recommendations and price targets for Grupo Financiero Galicia and Heritage Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grupo Financiero Galicia	1	4	2	1	2.38
Heritage Financial	1	2	4	0	2.43

Grupo Financiero Galicia currently has a consensus price target of $68.33, indicating a potential upside of 84.58%. Heritage Financial has a consensus price target of $32.67, indicating a potential upside of 17.46%. Given Grupo Financiero Galicia’s higher possible upside, equities research analysts clearly believe Grupo Financiero Galicia is more favorable than Heritage Financial.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Grupo Financiero Galicia	N/A	N/A	N/A
Heritage Financial	20.44%	8.78%	1.15%

Institutional & Insider Ownership

78.3% of Heritage Financial shares are held by institutional investors. 1.5% of Heritage Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Grupo Financiero Galicia pays an annual dividend of $0.57 per share and has a dividend yield of 1.5%. Heritage Financial pays an annual dividend of $1.00 per share and has a dividend yield of 3.6%. Grupo Financiero Galicia pays out 23.3% of its earnings in the form of a dividend. Heritage Financial pays out 47.6% 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 raised its dividend for 14 consecutive years. Heritage Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Grupo Financiero Galicia has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500. Comparatively, Heritage Financial has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500.

Valuation and Earnings

This table compares Grupo Financiero Galicia and Heritage Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grupo Financiero Galicia	$10.56 billion	0.56	$170.02 million	$2.45	15.11
Heritage Financial	$335.97 million	3.39	$67.53 million	$2.10	13.24

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

Summary

Heritage Financial beats Grupo Financiero Galicia on 10 of the 18 factors compared between the two stocks.

About Grupo Financiero Galicia

Grupo Financiero Galicia S.A., a financial service holding company, provides various financial products and services to individuals and companies in Argentina. The company operates through Banks, NaranjaX, Insurance, and Other Businesses segments. It also offers personal loans; express and mortgage loans; pledge and credit card loans; credit and debit cards; and online banking services, as well as savings, deposits, and checking accounts related services. In addition, the company offers financing products; consumer finance and digital banking services; electronic check; global custody services; Fima funds; financial and stock market services to individuals, companies, and financial institutions; foreign trade services; and capital market and investment banking products that include debt securities, short-term securities, and financial trusts. Further, it provides robbery, personal accident, life collective, home, life, integral, pet, surety, and technical insurance products. Additionally, the company offers private banking services to high net worth individuals; and operates digital investment platform. Grupo Financiero Galicia S.A. was founded in 1905 and is based in Buenos Aires, Argentina.

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.