LifeStore Financial Group (OTCMKTS:LSFG) & Heritage Financial (NASDAQ:HFWA) Critical Survey

LifeStore Financial Group (OTCMKTS:LSFG) and Heritage Financial (NASDAQ:HFWA) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, risk and profitability.

Analyst Ratings

This is a summary of recent recommendations for LifeStore Financial Group and Heritage Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LifeStore Financial Group	0	0	0	0	0.00
Heritage Financial	0	2	1	0	2.33

Heritage Financial has a consensus target price of $27.6667, suggesting a potential upside of 22.91%. Given Heritage Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Heritage Financial is more favorable than LifeStore Financial Group.

Volatility & Risk

LifeStore Financial Group has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500. Comparatively, Heritage Financial has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500.

Dividends

LifeStore Financial Group pays an annual dividend of $0.60 per share and has a dividend yield of 1.2%. Heritage Financial pays an annual dividend of $0.96 per share and has a dividend yield of 4.3%. Heritage Financial pays out 67.1% of its earnings in the form of a dividend. Heritage Financial has raised 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.

Institutional & Insider Ownership

78.3% of Heritage Financial shares are owned by institutional investors. 12.2% of LifeStore Financial Group shares are owned by insiders. Comparatively, 1.9% of Heritage Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
LifeStore Financial Group	N/A	N/A	N/A
Heritage Financial	15.22%	7.34%	0.90%

Valuation & Earnings

This table compares LifeStore Financial Group and Heritage Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LifeStore Financial Group	N/A	N/A	N/A	N/A	N/A
Heritage Financial	$317.18 million	2.42	$43.26 million	$1.43	15.74

Heritage Financial has higher revenue and earnings than LifeStore Financial Group.

Summary

Heritage Financial beats LifeStore Financial Group on 11 of the 13 factors compared between the two stocks.

About LifeStore Financial Group

LifeStore Financial Group, Inc. operates as a federally chartered thrift holding company for LifeStore Bank that provides personal and business banking products and services in North Carolina. The company offers checking, savings, and money market accounts, as well as certificates of deposit; mortgage loans, automobile loans, home equity lines of credit, commercial real estate loans, commercial construction loans, investment property loans, equipment loans, working capital loans/lines of credit, and small business administration loans; and credit cards. It also provides insurance agency products and services; investment and cash management services; and online and mobile banking services. The company was formerly known as AF Financial Group and changed its name to LifeStore Financial Group, Inc. in September 2009. LifeStore Financial Group, Inc. was founded in 1939 and is headquartered in West Jefferson, North Carolina. Lifestore Financial Group, Inc. operates as a subsidiary of AsheCo MHC, Inc.

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.