NasdaqGS:HFWA

Stock Analysis Report

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Executive Summary

Heritage Financial Corporation operates as the bank holding company for Heritage Bank that provides various financial services to businesses and individuals in the United States. More Details


Snowflake Analysis

Flawless balance sheet average dividend payer.


Similar Companies

Share Price & News

How has Heritage Financial's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: HFWA is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: HFWA's weekly volatility (8%) has been stable over the past year.


Market Performance


7 Day Return

-3.6%

HFWA

-0.3%

US Banks

0.7%

US Market


1 Year Return

-12.5%

HFWA

-16.2%

US Banks

22.2%

US Market

Return vs Industry: HFWA exceeded the US Banks industry which returned -16.6% over the past year.

Return vs Market: HFWA underperformed the US Market which returned 22.7% over the past year.


Shareholder returns

HFWAIndustryMarket
7 Day-3.6%-0.3%0.7%
30 Day12.3%20.3%11.8%
90 Day16.8%19.7%8.6%
1 Year-9.1%-12.5%-13.1%-16.2%25.0%22.2%
3 Year-17.0%-24.2%-3.8%-11.8%49.4%39.5%
5 Year50.9%29.6%42.5%24.8%100.2%78.1%

Long-Term Price Volatility Vs. Market

How volatile is Heritage Financial's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Heritage Financial undervalued compared to its fair value and its price relative to the market?

21.76x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: HFWA ($23.93) is trading above our estimate of fair value ($18.05)

Significantly Below Fair Value: HFWA is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: HFWA is poor value based on its PE Ratio (21.8x) compared to the US Banks industry average (11.3x).

PE vs Market: HFWA is poor value based on its PE Ratio (21.8x) compared to the US market (19.4x).


Price to Earnings Growth Ratio

PEG Ratio: HFWA is poor value based on its PEG Ratio (2.4x)


Price to Book Ratio

PB vs Industry: HFWA is overvalued based on its PB Ratio (1.1x) compared to the US Banks industry average (0.9x).


Next Steps

Future Growth

How is Heritage Financial forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

9.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HFWA's forecast earnings growth (9.1% per year) is above the savings rate (2.2%).

Earnings vs Market: HFWA's earnings (9.1% per year) are forecast to grow slower than the US market (21.8% per year).

High Growth Earnings: HFWA's earnings are forecast to grow, but not significantly.

Revenue vs Market: HFWA's revenue is expected to decline over the next 3 years (-1.9% per year).

High Growth Revenue: HFWA's revenue is forecast to decline over the next 3 years (-1.9% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HFWA's Return on Equity is forecast to be low in 3 years time (5.9%).


Next Steps

Past Performance

How has Heritage Financial performed over the past 5 years?

10.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HFWA has high quality earnings.

Growing Profit Margin: HFWA's current net profit margins (20.8%) are lower than last year (29.1%).


Past Earnings Growth Analysis

Earnings Trend: HFWA's earnings have grown by 10.6% per year over the past 5 years.

Accelerating Growth: HFWA's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: HFWA had negative earnings growth (-40.5%) over the past year, making it difficult to compare to the Banks industry average (-4.1%).


Return on Equity

High ROE: HFWA's Return on Equity (5%) is considered low.


Next Steps

Financial Health

How is Heritage Financial's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: HFWA's Assets to Equity ratio (8.3x) is low.

Allowance for Bad Loans: HFWA has a sufficient allowance for bad loans (139%).

Low Risk Liabilities: 97% of HFWA's liabilities are made up of primarily low risk sources of funding.

Loan Level: HFWA has an appropriate level of Loans to Assets ratio (69%).

Low Risk Deposits: HFWA's Loans to Deposits ratio (81%) is appropriate.

Level of Bad Loans: HFWA has an appropriate level of bad loans (1.1%).


Next Steps

Dividend

What is Heritage Financial current dividend yield, its reliability and sustainability?

3.76%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: HFWA's dividend (3.76%) is higher than the bottom 25% of dividend payers in the US market (1.48%).

High Dividend: HFWA's dividend (3.76%) is low compared to the top 25% of dividend payers in the US market (4.14%).


Stability and Growth of Payments

Stable Dividend: HFWA's dividend payments have been volatile in the past 10 years.

Growing Dividend: HFWA's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (71.8%), HFWA's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HFWA's dividends in 3 years are forecast to be covered by earnings (60.3% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.8yrs

Average management tenure


CEO

Jeff Deuel (61 yo)

1.42yrs

Tenure

US$1,087,339

Compensation

Mr. Jeffrey J. Deuel, also known as Jeff, is the Chief Executive Officer and Director of Heritage Financial Corporation since July 1, 2019. Mr. Deuel has been President of Heritage Financial Corporation si...


CEO Compensation Analysis

Compensation vs Market: Jeff's total compensation ($USD1.09M) is below average for companies of similar size in the US market ($USD2.60M).

Compensation vs Earnings: Jeff's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Brian Vance
Executive Chairman1.5yrsUS$1.44m0.35%
$ 3.0m
Jeffrey Deuel
President1.42yrsUS$1.09m0.11%
$ 925.5k
Donald Hinson
Executive VP & CFO13.25yrsUS$651.93k0.090%
$ 758.1k
Bryan McDonald
Executive VP & COOno dataUS$747.94k0.064%
$ 542.4k
Cindy Huntley
Executive VP & Chief Banking Officer of Heritage Bank4.83yrsUS$459.86k0.053%
$ 447.9k
William Glasby
Executive VP & CTO3.92yrsno data0.0036%
$ 30.1k
Sabrina Robison
Senior VP & Chief Human Resources Officer18.92yrsno data0.059%
$ 495.8k
Kaylene Lahn
Senior VP & Corporate Secretary12.25yrsno datano data
Thomas Henning
Executive VP & Chief Risk Officer of Haritage Bankno datano data0.0060%
$ 51.1k
Anthony Chalfant
Chief Credit Officer0.42yrno data0.048%
$ 404.8k

4.8yrs

Average Tenure

58yo

Average Age

Experienced Management: HFWA's management team is considered experienced (4.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Brian Vance
Executive Chairman1.5yrsUS$1.44m0.35%
$ 3.0m
Jeffrey Deuel
President1.42yrsUS$1.09m0.11%
$ 925.5k
Anthony Pickering
Independent Director6.58yrsUS$81.59k0.15%
$ 1.3m
John Clees
Independent Director15.5yrsUS$93.09k0.14%
$ 1.2m
Brian Charneski
Lead Independent Director1.42yrsUS$107.59k0.12%
$ 1.0m
Jeffrey Lyon
Independent Director19.92yrsUS$83.59k0.12%
$ 973.1k
Kimberly Ellwanger
Independent Director14.92yrsUS$88.59k0.060%
$ 509.3k
Ann Watson
Independent Director8.17yrsUS$90.59k0.035%
$ 292.6k
Gragg Miller
Independent Director6.58yrsUS$88.59k0.076%
$ 641.9k
Stephen Dennis
Independent Director2.75yrsUS$81.59k0.089%
$ 755.3k
Deborah Gavin
Independent Director6.58yrsUS$93.09k0.035%
$ 294.8k

6.6yrs

Average Tenure

66yo

Average Age

Experienced Board: HFWA's board of directors are considered experienced (6.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: HFWA insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Heritage Financial Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Heritage Financial Corporation
  • Ticker: HFWA
  • Exchange: NasdaqGS
  • Founded: 1927
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: US$844.123m
  • Shares outstanding: 35.89m
  • Website: https://www.hf-wa.com

Number of Employees


Location

  • Heritage Financial Corporation
  • 201 Fifth Avenue SW
  • Olympia
  • Washington
  • 98501
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HFWANasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJan 1998

Biography

Heritage Financial Corporation operates as the bank holding company for Heritage Bank that provides various financial services to businesses and individuals in the United States. The company accepts variou...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/12/02 23:01
End of Day Share Price2020/12/02 00:00
Earnings2020/09/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.