Head-To-Head Review: Heritage Global (NASDAQ:HGBL) & ChoiceOne Financial Services (NASDAQ:COFS)

ChoiceOne Financial Services (NASDAQ:COFS) and Heritage Global (NASDAQ:HGBL) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, institutional ownership and risk.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for ChoiceOne Financial Services and Heritage Global, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ChoiceOne Financial Services	0	3	1	0	2.25
Heritage Global	1	1	1	1	2.50

ChoiceOne Financial Services currently has a consensus price target of $34.00, indicating a potential upside of 10.14%. Heritage Global has a consensus price target of $4.50, indicating a potential upside of 275.00%. Given Heritage Global’s stronger consensus rating and higher probable upside, analysts plainly believe Heritage Global is more favorable than ChoiceOne Financial Services.

Volatility & Risk

ChoiceOne Financial Services has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Heritage Global has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500.

Earnings and Valuation

This table compares ChoiceOne Financial Services and Heritage Global”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ChoiceOne Financial Services	$172.96 million	2.67	$28.18 million	$3.70	8.34
Heritage Global	$50.98 million	0.82	$3.59 million	$0.10	12.00

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

Insider and Institutional Ownership

19.9% of ChoiceOne Financial Services shares are owned by institutional investors. Comparatively, 33.5% of Heritage Global shares are owned by institutional investors. 6.5% of ChoiceOne Financial Services shares are owned by insiders. Comparatively, 14.0% of Heritage Global shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ChoiceOne Financial Services	23.07%	12.46%	1.29%
Heritage Global	6.45%	4.88%	3.70%

About ChoiceOne Financial Services

ChoiceOne Financial Services, Inc. operates as the bank holding company for ChoiceOne Bank that provides banking services to corporations, partnerships, and individuals in Michigan. The company offers various deposit products, including time, savings, and demand deposits, safe deposit, and automated transaction machine services. It also provides commercial lending products, such as business, industry, agricultural, construction, inventory, and real estate loans; and consumer loans comprising direct and indirect loans to consumers and purchasers of residential and real properties. In addition, the company offers alternative investment products, which include annuities and mutual funds; and sells insurance policies, such as life and health for commercial and consumer clients. Further, it provides trust and wealth management services. ChoiceOne Financial Services, Inc. was founded in 1898 and is headquartered in Sparta, Michigan.

About Heritage Global

Heritage Global Inc., together with its subsidiaries, operates as an asset services company with focus on financial and industrial asset transactions. The company operates in three segments: Auction and Liquidation, Refurbishment & Resale, and Brokerage. It provides a suite of market making, acquisitions, refurbishment, dispositions, valuations, and secured lending services. The company focuses on identifying, valuing, acquiring, and monetizing underlying tangible assets. It acts as an adviser, as well as a principal, acquiring, or brokering manufacturing facilities; surplus industrial machinery and equipment; industrial inventories; and charged-off receivable portfolios. The company was formerly known as Counsel RB Capital Inc. and changed its name to Heritage Global, Inc. in August 2013. Heritage Global, Inc. was founded in 1937 and is headquartered in San Diego, California.