Heritage Financial Corporation (HFWA) vs Preferred Bank (PFBC)

Heritage Financial Corporation and Preferred Bank are both Banks Regional companies. Heritage Financial Corporation and Preferred Bank are of similar size ($1.2B and $1.2B). Preferred Bank trades at the lower P/E: 9.4× against 14.1×. Heritage Financial Corporation grew revenue faster over the last twelve months: 21.5% against 0.55%. Preferred Bank has the higher net margin (26.2% vs 19.2%) and the higher return on invested capital (27.0% vs 5.47%). Both pay a dividend; Heritage Financial Corporation yields more (3.43% vs 3.07%). Across the 18 metrics below, Preferred Bank leads on 11 and Heritage Financial Corporation on 7.

Valuation

Metric HFWA PFBC Banks Regional median
P/E 14.08 9.44 12.02
P/S 2.89 2.44 2.36
P/B 1.07 1.55 1.23
Price to free cash flow 14.48 8.78 10.60
EV/EBITDA — — —
EV/Sales — — —
Earnings yield 7.10% 10.60% 8.21%
Free cash flow yield 6.90% 11.39% 9.23%

Profitability

Metric HFWA PFBC Banks Regional median
Gross margin 78.21% 57.93% 69.81%
Operating margin 0.00% 0.00% 0.00%
Net margin 19.23% 26.20% 18.82%
Free cash flow margin 0.00% 0.00% 17.97%
Return on equity 7.79% 0.00% 10.28%
Return on assets 1.00% 1.75% 1.13%
Return on invested capital 5.47% 26.98% 8.45%

Growth

Metric HFWA PFBC Banks Regional median
Revenue growth (TTM) 21.51% 0.55% 6.37%
EPS growth (last fiscal year) 58.06% 7.99% 18.85%
Revenue growth, 5-year CAGR 5.96% 18.09% 12.65%
Net income growth, 5-year CAGR 7.72% 14.04% 9.81%

Health

Metric HFWA PFBC Banks Regional median
Debt to equity 0.13 0.44 0.17
Current ratio 0.83 1.05 0.93
Net debt to EBITDA 0.00 0.00 0.00

Dividend

Metric HFWA PFBC Banks Regional median
Dividend yield 3.43% 3.07% 2.49%
Payout ratio 0.49 0.30 0.29

Size

Metric HFWA PFBC Banks Regional median
Market cap 1.16b 1.23b 934.85m

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