Contrasting Heritage Financial (NASDAQ:HFWA) & Great Southern Bancorp (NASDAQ:GSBC)

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

Volatility and Risk

Heritage Financial has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500. Comparatively, Great Southern Bancorp has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Heritage Financial	15.22%	7.34%	0.90%
Great Southern Bancorp	19.18%	11.17%	1.15%

Dividends

Heritage Financial pays an annual dividend of $0.96 per share and has a dividend yield of 3.9%. Great Southern Bancorp pays an annual dividend of $1.72 per share and has a dividend yield of 2.8%. Heritage Financial pays out 67.1% of its earnings in the form of a dividend. Great Southern Bancorp pays out 29.3% 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 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.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Heritage Financial and Great Southern Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Heritage Financial	0	3	2	0	2.40
Great Southern Bancorp	0	2	1	0	2.33

Heritage Financial currently has a consensus target price of $28.50, indicating a potential upside of 17.09%. Great Southern Bancorp has a consensus target price of $60.50, indicating a potential downside of 1.19%. Given Heritage Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Heritage Financial is more favorable than Great Southern Bancorp.

Institutional and Insider Ownership

78.3% of Heritage Financial shares are owned by institutional investors. Comparatively, 41.7% of Great Southern Bancorp shares are owned by institutional investors. 1.9% of Heritage Financial shares are owned by insiders. Comparatively, 27.9% of Great Southern Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Heritage Financial	$317.18 million	2.61	$43.26 million	$1.43	17.02
Great Southern Bancorp	$226.53 million	3.06	$61.81 million	$5.87	10.43

Great Southern Bancorp has lower revenue, but higher earnings than Heritage Financial. Great Southern Bancorp is trading at a lower price-to-earnings ratio than Heritage Financial, indicating that it is currently the more affordable of the two stocks.

Summary

Great Southern Bancorp beats Heritage Financial 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 Great Southern Bancorp

Great Southern Bancorp, Inc. operates as a bank holding company for Great Southern Bank that provides a range of financial services in the United States. Its deposit products include regular savings accounts, checking accounts, money market accounts, fixed interest rate certificates with varying maturities, certificates of deposit, brokered certificates, and individual retirement accounts. The company's loan portfolio comprises residential and commercial real estate loans, commercial business loans, construction loans, home improvement loans, and unsecured consumer loans, as well as secured consumer loans, such as automobile loans, boat loans, home equity loans, and loans secured by savings deposits. It also provides insurance and merchant banking services. The company was founded in 1923 and is headquartered in Springfield, Missouri.