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

Analyst Ratings

This is a breakdown of current ratings and target prices for Guaranty Bancshares and Heritage Financial Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Guaranty Bancshares 0 2 0 0 2.00
Heritage Financial Corporation 0 2 0 0 2.00

Guaranty Bancshares currently has a consensus price target of $34.00, suggesting a potential upside of 15.53%. Heritage Financial Corporation has a consensus price target of $28.00, suggesting a potential upside of 6.87%. Given Guaranty Bancshares’ higher possible upside, equities research analysts clearly believe Guaranty Bancshares is more favorable than Heritage Financial Corporation.

Profitability

This table compares Guaranty Bancshares and Heritage Financial Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Guaranty Bancshares N/A N/A N/A
Heritage Financial Corporation 23.81% 8.56% 1.08%

Valuation and Earnings

This table compares Guaranty Bancshares and Heritage Financial Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Guaranty Bancshares $67.66 million 4.79 N/A N/A N/A
Heritage Financial Corporation $165.38 million 4.72 $41.69 million $1.40 18.71

Heritage Financial Corporation has higher revenue and earnings than Guaranty Bancshares.

Dividends

Guaranty Bancshares pays an annual dividend of $0.52 per share and has a dividend yield of 1.8%. Heritage Financial Corporation pays an annual dividend of $0.52 per share and has a dividend yield of 2.0%. Heritage Financial Corporation pays out 37.1% of its earnings in the form of a dividend.

Risk & Volatility

Guaranty Bancshares has a beta of 0.01, suggesting that its stock price is 99% less volatile than the S&P 500. Comparatively, Heritage Financial Corporation has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500.

Institutional and Insider Ownership

19.4% of Guaranty Bancshares shares are held by institutional investors. Comparatively, 75.9% of Heritage Financial Corporation shares are held by institutional investors. 34.1% of Guaranty Bancshares shares are held by insiders. Comparatively, 2.7% of Heritage Financial Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Heritage Financial Corporation beats Guaranty Bancshares on 7 of the 11 factors compared between the two stocks.

Guaranty Bancshares Company Profile

Guaranty Bancshares, Inc. is the holding company for Guaranty Bank & Trust (Guaranty). Guaranty offers various solutions, such as personal banking, business banking, mortgage and wealth management. Its personal banking solutions include checking accounts, which include compare accounts, green checking, student checking, choice checking, guaranty interest checking, order checks and debit cards; savings accounts, which include regular savings, premier money market, certificate of deposit, individual retirement account (IRA) options and health savings account, and online banking, which includes money desktop and e-statements. Guaranty offers various loans, including line of credit, small business administration loans and real estate loans. Guaranty also offers mobile banking solutions, mortgage warehouse lending solutions and treasury management solutions. It has approximately 30 bank locations in over 20 Texas communities.

Heritage Financial Corporation Company Profile

Heritage Financial Corporation is a bank holding company. The Company is engaged in the business of planning, directing and coordinating the business activities of its bank subsidiary, Heritage Bank (the Bank). The Bank’s lending activities focus on commercial business lending. The Bank also originates consumer loans, real estate construction and land development loans, and one- to four-family residential loans. The Bank’s investment securities available for sale include the United States treasury and the United States Government-sponsored agencies; municipal securities; mortgage-backed securities and collateralized mortgage obligations, which include residential and commercial; collateralized loan obligations; corporate obligations, and other securities. The Bank’s primary sources of funds are deposits and loan repayments. Borrowings are used on a short-term basis to compensate for reductions in other sources of funds, such as deposit inflows.

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