Heritage Commerce (NASDAQ:HTBK – Get Rating) and Penns Woods Bancorp (NASDAQ:PWOD – Get Rating) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, profitability, analyst recommendations, earnings and risk.
Dividends
Heritage Commerce pays an annual dividend of $0.52 per share and has a dividend yield of 5.5%. Penns Woods Bancorp pays an annual dividend of $1.28 per share and has a dividend yield of 5.3%. Heritage Commerce pays out 47.7% of its earnings in the form of a dividend. Penns Woods Bancorp pays out 51.8% 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. Heritage Commerce is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings & Valuation
This table compares Heritage Commerce and Penns Woods Bancorp’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Heritage Commerce | $198.94 million | 2.88 | $66.56 million | $1.09 | 8.62 |
| Penns Woods Bancorp | $73.64 million | 2.30 | $17.42 million | $2.47 | 9.70 |
Analyst Recommendations
This is a summary of current recommendations and price targets for Heritage Commerce and Penns Woods Bancorp, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Heritage Commerce | 0 | 0 | 1 | 0 | 3.00 |
| Penns Woods Bancorp | 0 | 0 | 0 | 0 | N/A |
Heritage Commerce currently has a consensus price target of $14.83, indicating a potential upside of 57.80%. Given Heritage Commerce’s higher probable upside, analysts plainly believe Heritage Commerce is more favorable than Penns Woods Bancorp.
Institutional & Insider Ownership
73.1% of Heritage Commerce shares are owned by institutional investors. Comparatively, 18.6% of Penns Woods Bancorp shares are owned by institutional investors. 4.1% of Heritage Commerce shares are owned by company insiders. Comparatively, 4.3% of Penns Woods Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Profitability
This table compares Heritage Commerce and Penns Woods Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Heritage Commerce | 33.46% | 10.86% | 1.25% |
| Penns Woods Bancorp | 23.66% | 10.60% | 0.93% |
Risk and Volatility
Heritage Commerce has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500. Comparatively, Penns Woods Bancorp has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500.
Summary
Heritage Commerce beats Penns Woods Bancorp on 12 of the 15 factors compared between the two stocks.
About Heritage Commerce
Heritage Commerce Corp. is a holding company, which engages in the provision of banking. It operates through the Banking and Factoring segments. The Banking segment includes the holding company’s results of operations. The Factoring segment focuses on factoring originated by Bay View Funding. The company was founded in 1997 and is headquartered in San Jose, CA.
About Penns Woods Bancorp
Penns Woods Bancorp, Inc. operates as a bank holding company. The firm offers products including accepting time, demand and savings deposits, including Super NOW accounts, regular savings accounts, money market certificates, investment certificates, fixed-rate certificates of deposit and club accounts. It also provides secured & unsecured commercial and consumer loans, financing commercial transactions, making construction & mortgage loans and the rental of safe deposit facilities. The company was founded on January 7, 1983 and is headquartered in Williamsport, PA.
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