Critical Analysis: Southern Missouri Bancorp (SMBC) and Heritage Financial (HFWA)

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

Dividends

Get Southern Missouri Bancorp alerts:

Southern Missouri Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 1.1%. Heritage Financial pays an annual dividend of $0.60 per share and has a dividend yield of 1.8%. Heritage Financial pays out 40.5% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent ratings and price targets for Southern Missouri Bancorp and Heritage Financial, as provided by MarketBeat.com.

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

Heritage Financial has a consensus price target of $35.00, suggesting a potential upside of 2.19%. Given Heritage Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Heritage Financial is more favorable than Southern Missouri Bancorp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Southern Missouri Bancorp	22.01%	12.60%	1.09%
Heritage Financial	20.10%	9.09%	1.16%

Institutional & Insider Ownership

47.1% of Southern Missouri Bancorp shares are held by institutional investors. Comparatively, 77.1% of Heritage Financial shares are held by institutional investors. 17.9% of Southern Missouri Bancorp shares are held by insiders. Comparatively, 2.7% of Heritage Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Southern Missouri Bancorp and Heritage Financial’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southern Missouri Bancorp	$72.57 million	4.94	$15.55 million	N/A	N/A
Heritage Financial	$183.29 million	6.36	$41.79 million	$1.48	23.14

Heritage Financial has higher revenue and earnings than Southern Missouri Bancorp.

Risk & Volatility

Southern Missouri Bancorp has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500. Comparatively, Heritage Financial has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500.

Summary

Heritage Financial beats Southern Missouri Bancorp on 10 of the 15 factors compared between the two stocks.

Southern Missouri Bancorp Company Profile

Southern Missouri Bancorp, Inc. operates as the bank holding company for Southern Bank that provides banking and financial services to individuals and corporate customers in the United States. It offers various deposit instruments, including demand deposit accounts, negotiable order of withdrawal accounts, money market deposit accounts, saving accounts, certificates of deposit, and retirement savings plans. The company also provides loans for the acquisition or refinance of one-to four-family residences; loans secured by commercial real estate, including land, shopping centers, retail establishments, nursing homes and other healthcare related facilities, and other businesses; construction loans; and various secured consumer loans comprising home equity, direct and indirect automobile loans, second mortgages, mobile home loans, and loans secured by deposits. In addition, it offers commercial business loans, such as loans to finance accounts receivable, inventory, equipment, and operating lines of credit. As of June 30, 2017, the company operated 38 full-service branch offices, and 3 limited-service branch offices located in Poplar Bluff, Van Buren, Dexter, Kennett, Doniphan, Sikeston, Qulin, Matthews, Springfield, Thayer, West Plains, Alton, Clever, Forsyth, Fremont Hills, Kimberling City, Ozark, Nixa, Rogersville, Cape Girardeau, Jackson, Jonesboro, Paragould, Brookland, Batesville, Searcy, Bald Knob, Arkansas, and Illinois. Southern Missouri Bancorp, Inc. was founded in 1887 and is based in Poplar Bluff, Missouri.

Heritage Financial Company Profile

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.

Zacks: Analysts Expect Kite Realty Group Trust (KRG) Will Announce Earnings of $0.50 Per Share

Wall Street brokerages expect Kite Realty Group Trust (NYSE:KRG) to announce $0.50 earnings per share (EPS) for the current quarter, Zacks Investment Research reports. Five analysts have made estimates for Kite Realty Group Trust’s earnings, with the lowest EPS estimate coming in at $0.49 and the highest estimate coming in at $0.51. Kite Realty Group Trust reported earnings per share of $0.54 during the same quarter last year, which suggests a negative year over year growth rate of 7.4%. The company is scheduled to report its next quarterly earnings results on Wednesday, July 25th.

On average, analysts expect that Kite Realty Group Trust will report full year earnings of $2.00 per share for the current fiscal year, with EPS estimates ranging from $1.98 to $2.02. For the next year, analysts anticipate that the company will post earnings of $2.04 per share, with EPS estimates ranging from $2.02 to $2.06. Zacks’ EPS calculations are a mean average based on a survey of sell-side research firms that follow Kite Realty Group Trust.

Get Kite Realty Group Trust alerts:

Kite Realty Group Trust (NYSE:KRG) last announced its earnings results on Wednesday, April 25th. The real estate investment trust reported $0.51 EPS for the quarter, beating the consensus estimate of $0.49 by $0.02. The business had revenue of $89.76 million for the quarter, compared to the consensus estimate of $88.38 million. Kite Realty Group Trust had a negative return on equity of 0.38% and a negative net margin of 1.69%. The company’s revenue was down .4% on a year-over-year basis. During the same period last year, the business posted $0.51 EPS.

Several equities research analysts recently commented on KRG shares. Robert W. Baird reiterated a “buy” rating and set a $19.00 target price on shares of Kite Realty Group Trust in a report on Wednesday, March 21st. Barclays reiterated a “buy” rating and set a $20.00 target price on shares of Kite Realty Group Trust in a report on Thursday, March 8th. TheStreet downgraded Kite Realty Group Trust from a “c” rating to a “d+” rating in a report on Wednesday, April 25th. Sandler O’Neill set a $15.00 target price on Kite Realty Group Trust and gave the company a “hold” rating in a report on Tuesday, April 24th. Finally, ValuEngine downgraded Kite Realty Group Trust from a “sell” rating to a “strong sell” rating in a report on Wednesday, May 2nd. One research analyst has rated the stock with a sell rating, six have issued a hold rating and five have issued a buy rating to the stock. The company currently has a consensus rating of “Hold” and an average target price of $18.57.

A number of hedge funds have recently bought and sold shares of KRG. Certified Advisory Corp purchased a new stake in Kite Realty Group Trust during the 4th quarter worth approximately $137,000. Bridgeworth LLC purchased a new stake in Kite Realty Group Trust during the 1st quarter worth approximately $171,000. SG Americas Securities LLC increased its holdings in Kite Realty Group Trust by 78.3% during the 1st quarter. SG Americas Securities LLC now owns 11,693 shares of the real estate investment trust’s stock worth $178,000 after purchasing an additional 5,135 shares during the last quarter. Xact Kapitalforvaltning AB purchased a new stake in Kite Realty Group Trust during the 4th quarter worth approximately $202,000. Finally, Element Capital Management LLC purchased a new stake in Kite Realty Group Trust during the 1st quarter worth approximately $240,000. Institutional investors own 93.75% of the company’s stock.

Shares of NYSE:KRG remained flat at $$16.60 during mid-day trading on Tuesday. The company had a trading volume of 802,779 shares, compared to its average volume of 776,956. The stock has a market cap of $1.38 billion, a P/E ratio of 8.14, a P/E/G ratio of 1.93 and a beta of 0.51. The company has a current ratio of 0.84, a quick ratio of 0.84 and a debt-to-equity ratio of 1.08. Kite Realty Group Trust has a 1-year low of $13.87 and a 1-year high of $21.57.

The firm also recently disclosed a quarterly dividend, which will be paid on Friday, July 13th. Shareholders of record on Friday, July 6th will be issued a dividend of $0.317 per share. The ex-dividend date of this dividend is Thursday, July 5th. This represents a $1.27 annualized dividend and a yield of 7.64%. Kite Realty Group Trust’s dividend payout ratio is presently 62.25%.

Kite Realty Group Trust Company Profile

Kite Realty Group Trust is a full-service, vertically integrated real estate investment trust (REIT) engaged primarily in the ownership and operation, acquisition, development and redevelopment of high-quality neighborhood and community shopping centers in select markets in the United States. As of December 31, 2017, we owned interests in 117 operating and redevelopment properties totaling approximately 23.3 million square feet and two development projects currently under construction.

Get a free copy of the Zacks research report on Kite Realty Group Trust (KRG)

For more information about research offerings from Zacks Investment Research, visit Zacks.com