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.
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