Head-To-Head Comparison: Columbia Financial (NASDAQ:CLBK) and Heritage Commerce (NASDAQ:HTBK)

Heritage Commerce (NASDAQ:HTBK) and Columbia Financial (NASDAQ:CLBK) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, dividends, institutional ownership, risk, profitability, analyst recommendations and valuation.

Institutional & Insider Ownership

75.6% of Heritage Commerce shares are held by institutional investors. Comparatively, 12.7% of Columbia Financial shares are held by institutional investors. 2.7% of Heritage Commerce shares are held by insiders. Comparatively, 3.5% of Columbia Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Heritage Commerce and Columbia Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Heritage Commerce	0	5	2	0	2.29
Columbia Financial	0	1	3	0	2.75

Heritage Commerce currently has a consensus price target of $13.12, indicating a potential downside of 2.42%. Columbia Financial has a consensus price target of $15.10, indicating a potential upside of 30.74%. Given Columbia Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Columbia Financial is more favorable than Heritage Commerce.

Volatility & Risk

Heritage Commerce has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500. Comparatively, Columbia Financial has a beta of 0.24, suggesting that its share price is 76% less volatile than the S&P 500.

Dividends

Heritage Commerce pays an annual dividend of $0.52 per share and has a dividend yield of 3.9%. Columbia Financial pays an annual dividend of $0.20 per share and has a dividend yield of 1.7%. Heritage Commerce pays out 66.7% of its earnings in the form of a dividend. Columbia Financial pays out 58.8% 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.

Earnings & Valuation

This table compares Heritage Commerce and Columbia Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Heritage Commerce	$197.46 million	4.20	$47.83 million	$0.78	17.24
Columbia Financial	$508.02 million	6.13	$51.77 million	$0.34	33.97

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

Profitability

This table compares Heritage Commerce and Columbia Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Heritage Commerce	17.77%	8.07%	1.01%
Columbia Financial	11.19%	5.29%	0.56%

Summary

Columbia Financial beats Heritage Commerce on 9 of the 16 factors compared between the two stocks.

About Heritage Commerce

Heritage Commerce Corp operates as the bank holding company for Heritage Bank of Commerce that provides various commercial and personal banking services to residents and the business/professional community in California. Its deposit products for business banking and retail markets include interest and non-interest-bearing demand, savings, and money market accounts, as well as certificates of deposit and time deposits. The company’s loan portfolio comprises commercial loans, such as operating secured and unsecured loans advanced for working capital, equipment purchases, and other business purposes; commercial real estate loans; commercial construction loans for rental properties, commercial buildings, and homes; small business administration loans; home equity lines of credit; multifamily loans on residential properties; residential mortgage loans; and consumer loans consisting of loans for financing automobiles, various consumer goods, and other personal purposes. In addition, it offers other banking services, including cashier’s checks, bank by mail, night depositories, safe deposit boxes, direct deposit, automated payroll, electronic funds transfer, online bill pay, homeowner association, remote deposit capture, automated clearing house origination, electronic data interchange, and check imaging services, as well as other customary banking, factoring financing, and electronic banking services. Heritage Commerce Corp was founded in 1994 and is headquartered in San Jose, California.

About Columbia Financial

Columbia Financial, Inc., a bank holding company, provides various financial services to businesses and consumers in the United States. Its deposit products include checking, interest-earning checking products and municipal, savings and club deposits, and money market accounts, as well as certificates of deposit. The company also provides various loans, including multifamily and commercial real estate loans, commercial business loans, one-to-four family residential loans, construction loans, home equity loans and advances, and other consumer loans, such as automobiles and personal loans, as well as unsecured and overdraft lines of credit. In addition, it offers title insurance products; wealth management services; and cash management services comprising remote deposit, lockbox service, sweep accounts, and escrow services. The company operates full-service banking offices in New Jersey; and branch offices in Freehold, New Jersey. Columbia Financial, Inc. was founded in 1926 and is based in Fair Lawn, New Jersey. Columbia Financial, Inc. is a subsidiary of Columbia Bank MHC.