Heritage Financial (NASDAQ:HFWA – Get Free Report) and Inter & Co. Inc. (NASDAQ:INTR – Get Free Report) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.
Earnings and Valuation
This table compares Heritage Financial and Inter & Co. Inc.”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Heritage Financial | $335.97 million | 3.43 | $67.53 million | $2.10 | 13.41 |
| Inter & Co. Inc. | $1.93 billion | 1.26 | $235.05 million | $0.66 | 8.31 |
Dividends
Heritage Financial pays an annual dividend of $1.00 per share and has a dividend yield of 3.5%. Inter & Co. Inc. pays an annual dividend of $0.11 per share and has a dividend yield of 2.0%. Heritage Financial pays out 47.6% of its earnings in the form of a dividend. Inter & Co. Inc. pays out 16.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Heritage Financial has raised 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.
Risk & Volatility
Heritage Financial has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500. Comparatively, Inter & Co. Inc. has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500.
Institutional and Insider Ownership
78.3% of Heritage Financial shares are owned by institutional investors. Comparatively, 22.9% of Inter & Co. Inc. shares are owned by institutional investors. 1.5% of Heritage Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares Heritage Financial and Inter & Co. Inc.’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Heritage Financial | 20.44% | 8.78% | 1.15% |
| Inter & Co. Inc. | 11.23% | 14.94% | 1.57% |
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Heritage Financial and Inter & Co. Inc., as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Heritage Financial | 1 | 2 | 4 | 0 | 2.43 |
| Inter & Co. Inc. | 0 | 3 | 3 | 0 | 2.50 |
Heritage Financial presently has a consensus target price of $32.67, suggesting a potential upside of 15.96%. Inter & Co. Inc. has a consensus target price of $9.16, suggesting a potential upside of 67.00%. Given Inter & Co. Inc.’s stronger consensus rating and higher possible upside, analysts plainly believe Inter & Co. Inc. is more favorable than Heritage Financial.
Summary
Heritage Financial beats Inter & Co. Inc. on 9 of the 17 factors compared between the two stocks.
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.
About Inter & Co. Inc.
Inter & Co., Inc. Is a holding company, which engages in the provision of financial products and services. It operates through the following segments: Banking, Securities, Insurance Brokerage, Marketplace, Asset Management, Service, and Other. The Banking segment offers checking accounts cards, deposits, loans and advances, and other services through mobile application. The Securities segment is involved in the acquisition, sale and custody of securities, the structuring and distribution of securities in the capital market, and the provision of administration services to investment funds. The Insurance Brokerage segment includes insurance products underwritten by insurance companies, such as warranties, life, property and automobile insurance, and pension products, as well as consortium products provided by a third party. The Marketplace segment operates a digital platform, which offers goods and services to its customers. The Asset Management segment is composed of the operations related to the management of fund portfolios and other assets. The Service segment consists of collection and management of personal information, development and licensing of customized computer programs, development and licensing of non-customized computer programs and technical support, maintenance, and other information technology services. The company was founded on January 26, 2021 and is headquartered in Belo Horizonte, Brazil.
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