Analyzing Heritage Financial (NASDAQ:HFWA) & AMB Financial (OTCMKTS:AMFC)

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

Dividends

AMB Financial pays an annual dividend of $0.28 per share and has a dividend yield of 0.8%. Heritage Financial pays an annual dividend of $0.96 per share and has a dividend yield of 3.7%. Heritage Financial pays out 49.0% of its earnings in the form of a dividend. Heritage Financial has increased 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.

Valuation & Earnings

This table compares AMB Financial and Heritage Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AMB Financial	$23.37 million	1.28	$3.42 million	N/A	N/A
Heritage Financial	$335.97 million	3.20	$67.53 million	$1.96	13.32

Heritage Financial has higher revenue and earnings than AMB Financial.

Analyst Ratings

This is a summary of recent ratings and target prices for AMB Financial and Heritage Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AMB Financial	0	0	0	0	0.00
Heritage Financial	0	3	3	0	2.50

Heritage Financial has a consensus target price of $31.00, indicating a potential upside of 18.77%. Given Heritage Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Heritage Financial is more favorable than AMB Financial.

Institutional & Insider Ownership

1.2% of AMB Financial shares are held by institutional investors. Comparatively, 78.3% of Heritage Financial shares are held by institutional investors. 37.7% of AMB Financial shares are held by insiders. Comparatively, 1.8% of Heritage Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

AMB Financial has a beta of 0.15, indicating that its share price is 85% less volatile than the S&P 500. Comparatively, Heritage Financial has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AMB Financial	N/A	N/A	N/A
Heritage Financial	20.10%	8.61%	1.10%

Summary

Heritage Financial beats AMB Financial on 13 of the 15 factors compared between the two stocks.

About AMB Financial

AMB Financial Corp. operates as the bank holding company for American Community Bank of Indiana that provides financial services to customers in Indiana. The company provides savings, checking, health savings, individual retirement, and money market deposit accounts, as well as certificates of deposit. It offers business checking accounts, business debit and credit cards, and order business checks. In addition, the company offers mortgage loans, home equity loans, construction/lot loans, community loans, vehicle loans, and loan servicing; and commercial loans, commercial real estate loans, and SBA loans. Further, it provides merchant, remote deposit, wire services, fraud protection, and ACH origination; sweep services, zero balance accounts, lockbox services, vault services, and wealth management services; online, mobile, voice, and banking services; money order and e-statement services; cashier’s checks; and safe deposit boxes. The company was founded in 1910 and is headquartered in Saint John, Indiana.

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.