SouthCrest Financial Group (OTCMKTS:SCSG) versus Heritage Financial (NASDAQ:HFWA) Critical Review

Heritage Financial (NASDAQ:HFWA) and SouthCrest Financial Group (OTCMKTS:SCSG) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Heritage Financial	$335.97 million	2.85	$67.53 million	$1.96	14.38
SouthCrest Financial Group	N/A	N/A	N/A	N/A	N/A

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Heritage Financial	20.10%	8.61%	1.10%
SouthCrest Financial Group	N/A	N/A	N/A

Institutional & Insider Ownership

78.3% of Heritage Financial shares are owned by institutional investors. 1.8% of Heritage Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Heritage Financial and SouthCrest Financial Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Heritage Financial	0	4	2	0	2.33
SouthCrest Financial Group	0	0	0	0	0.00

Heritage Financial presently has a consensus price target of $31.25, indicating a potential upside of 10.85%. Given Heritage Financial’s stronger consensus rating and higher possible upside, research analysts clearly believe Heritage Financial is more favorable than SouthCrest Financial Group.

Summary

Heritage Financial beats SouthCrest Financial Group on 9 of the 9 factors compared between the two stocks.

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.

About SouthCrest Financial Group

SouthCrest Financial Group, Inc. operates as the bank holding company for SouthCrest Bank, N.A. that provides various banking products and services. It offers checking, savings, and money market accounts; and certificates of deposit. The company also provides personal loans for cars, boats, recreational vehicles, and other purchases; home equity lines of credit; loans on investment properties; owner occupied real estate, acquisition construction and development, professional practice acquisition, equipment and inventory, construction to permanent, and investment real estate loans; and working capital and lines of credit. In addition, it offers credit cards; remote deposit capture, positive pay, ACH, online wires, merchant, and reorder checks services; and online banking, online bill pay, mobile banking and deposit, and telephone banking services. The company serves retail, private, entrepreneurial, high-net-worth, and commercial customers. It operates through 9 branches in Georgia. SouthCrest Financial Group, Inc. was founded in 1910 and is headquartered in Atlanta, Georgia.