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HERITAGE FINANCIAL CORP (HFWA) Stock Fundamental Analysis

NASDAQ:HFWA - Nasdaq - US42722X1063 - Common Stock - Currency: USD

22.6  -0.39 (-1.7%)

After market: 22.6 0 (0%)

Fundamental Rating

4

HFWA gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 398 industry peers in the Banks industry. The financial health of HFWA is average, but there are quite some concerns on its profitability. HFWA has a decent growth rate and is not valued too expensively. HFWA also has an excellent dividend rating.


Dividend Valuation Growth Profitability Health

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2

1. Profitability

1.1 Basic Checks

In the past year HFWA was profitable.
HFWA had a positive operating cash flow in the past year.
HFWA had positive earnings in each of the past 5 years.
HFWA had a positive operating cash flow in each of the past 5 years.
HFWA Yearly Net Income VS EBIT VS OCF VS FCFHFWA Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20M 40M 60M 80M 100M

1.2 Ratios

With a Return On Assets value of 0.61%, HFWA is not doing good in the industry: 66.58% of the companies in the same industry are doing better.
The Return On Equity of HFWA (5.01%) is worse than 76.38% of its industry peers.
Industry RankSector Rank
ROA 0.61%
ROE 5.01%
ROIC N/A
ROA(3y)0.88%
ROA(5y)0.93%
ROE(3y)7.5%
ROE(5y)7.93%
ROIC(3y)N/A
ROIC(5y)N/A
HFWA Yearly ROA, ROE, ROICHFWA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2 4 6 8 10

1.3 Margins

Looking at the Profit Margin, with a value of 19.95%, HFWA is doing worse than 62.31% of the companies in the same industry.
In the last couple of years the Profit Margin of HFWA has declined.
The Operating Margin and Gross Margin are not available for HFWA so they could not be analyzed.
Industry RankSector Rank
OM N/A
PM (TTM) 19.95%
GM N/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y-21.2%
PM growth 5Y-7.25%
GM growth 3YN/A
GM growth 5YN/A
HFWA Yearly Profit, Operating, Gross MarginsHFWA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30 40

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4

2. Health

2.1 Basic Checks

HFWA does not have a ROIC to compare to the WACC, probably because it is not profitable.
Compared to 1 year ago, HFWA has less shares outstanding
HFWA has less shares outstanding than it did 5 years ago.
The debt/assets ratio for HFWA is higher compared to a year ago.
HFWA Yearly Shares OutstandingHFWA Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10M 20M 30M
HFWA Yearly Total Debt VS Total AssetsHFWA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B

2.2 Solvency

The Debt to FCF ratio of HFWA is 0.36, which is an excellent value as it means it would take HFWA, only 0.36 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of HFWA (0.36) is better than 85.68% of its industry peers.
HFWA has a Debt/Equity ratio of 0.03. This is a healthy value indicating a solid balance between debt and equity.
HFWA has a Debt to Equity ratio of 0.03. This is amongst the best in the industry. HFWA outperforms 85.68% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.03
Debt/FCF 0.36
Altman-Z N/A
ROIC/WACCN/A
WACC7.37%
HFWA Yearly LT Debt VS Equity VS FCFHFWA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M 800M

2.3 Liquidity

Industry RankSector Rank
Current Ratio N/A
Quick Ratio N/A
HFWA Yearly Current Assets VS Current LiabilitesHFWA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 50M 100M 150M 200M

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5

3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 18.05% over the past year.
Measured over the past years, HFWA shows a decrease in Earnings Per Share. The EPS has been decreasing by -7.49% on average per year.
Looking at the last year, HFWA shows a very negative growth in Revenue. The Revenue has decreased by -11.07% in the last year.
The Revenue has been decreasing by -1.36% on average over the past years.
EPS 1Y (TTM)18.05%
EPS 3Y-23.13%
EPS 5Y-7.49%
EPS Q2Q%206.25%
Revenue 1Y (TTM)-11.07%
Revenue growth 3Y-3.38%
Revenue growth 5Y-1.36%
Sales Q2Q%18.42%

3.2 Future

Based on estimates for the next years, HFWA will show a very strong growth in Earnings Per Share. The EPS will grow by 37.17% on average per year.
HFWA is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.07% yearly.
EPS Next Y65.96%
EPS Next 2Y37.17%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year11.5%
Revenue Next 2Y9.07%
Revenue Next 3YN/A
Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
HFWA Yearly Revenue VS EstimatesHFWA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 50M 100M 150M 200M 250M
HFWA Yearly EPS VS EstimatesHFWA Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 0.5 1 1.5 2 2.5

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5

4. Valuation

4.1 Price/Earnings Ratio

HFWA is valuated correctly with a Price/Earnings ratio of 14.39.
Based on the Price/Earnings ratio, HFWA is valued a bit more expensive than the industry average as 68.09% of the companies are valued more cheaply.
When comparing the Price/Earnings ratio of HFWA to the average of the S&P500 Index (28.79), we can say HFWA is valued slightly cheaper.
A Price/Forward Earnings ratio of 9.69 indicates a reasonable valuation of HFWA.
Compared to the rest of the industry, the Price/Forward Earnings ratio of HFWA is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.38, HFWA is valued rather cheaply.
Industry RankSector Rank
PE 14.39
Fwd PE 9.69
HFWA Price Earnings VS Forward Price EarningsHFWA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

Compared to the rest of the industry, the Price/Free Cash Flow ratio of HFWA is on the same level as its industry peers.
Industry RankSector Rank
P/FCF 12.59
EV/EBITDA N/A
HFWA Per share dataHFWA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 5 10 15 20 25

4.3 Compensation for Growth

HFWA's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
HFWA's earnings are expected to grow with 37.17% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.22
PEG (5Y)N/A
EPS Next 2Y37.17%
EPS Next 3YN/A

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7

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 4.18%, HFWA is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.54, HFWA pays a bit more dividend than its industry peers.
HFWA's Dividend Yield is rather good when compared to the S&P500 average which is at 2.47.
Industry RankSector Rank
Dividend Yield 4.18%

5.2 History

The dividend of HFWA has a limited annual growth rate of 1.86%.
HFWA has paid a dividend for at least 10 years, which is a reliable track record.
HFWA has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)1.86%
Div Incr Years4
Div Non Decr Years4
HFWA Yearly Dividends per shareHFWA Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.2 0.4 0.6 0.8 1

5.3 Sustainability

73.46% of the earnings are spent on dividend by HFWA. This is not a sustainable payout ratio.
HFWA's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP73.46%
EPS Next 2Y37.17%
EPS Next 3YN/A
HFWA Yearly Income VS Free CF VS DividendHFWA Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20M 40M 60M 80M
HFWA Dividend Payout.HFWA Dividend Payout, showing the Payout Ratio.HFWA Dividend Payout.PayoutRetained Earnings

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HERITAGE FINANCIAL CORP

NASDAQ:HFWA (4/25/2025, 8:13:01 PM)

After market: 22.6 0 (0%)

22.6

-0.39 (-1.7%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupBanks
GICS IndustryBanks
Earnings (Last)04-24 2025-04-24/bmo
Earnings (Next)07-23 2025-07-23/bmo
Inst Owners83.38%
Inst Owner Change-0.06%
Ins Owners1.39%
Ins Owner Change1.58%
Market Cap768.17M
Analysts75
Price Target28.97 (28.19%)
Short Float %2.22%
Short Ratio2.44
Dividend
Industry RankSector Rank
Dividend Yield 4.18%
Yearly Dividend0.92
Dividend Growth(5Y)1.86%
DP73.46%
Div Incr Years4
Div Non Decr Years4
Ex-Date02-06 2025-02-06 (0.24)
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-23.71%
Min EPS beat(2)-26.58%
Max EPS beat(2)-20.83%
EPS beat(4)1
Avg EPS beat(4)-26.96%
Min EPS beat(4)-61.08%
Max EPS beat(4)0.66%
EPS beat(8)2
Avg EPS beat(8)-19.97%
EPS beat(12)5
Avg EPS beat(12)-7.38%
EPS beat(16)9
Avg EPS beat(16)2.72%
Revenue beat(2)0
Avg Revenue beat(2)-12.28%
Min Revenue beat(2)-16.74%
Max Revenue beat(2)-7.83%
Revenue beat(4)0
Avg Revenue beat(4)-14.74%
Min Revenue beat(4)-20.4%
Max Revenue beat(4)-7.83%
Revenue beat(8)0
Avg Revenue beat(8)-13.57%
Revenue beat(12)2
Avg Revenue beat(12)-8.6%
Revenue beat(16)4
Avg Revenue beat(16)-6.78%
PT rev (1m)0%
PT rev (3m)5.71%
EPS NQ rev (1m)0.37%
EPS NQ rev (3m)5.17%
EPS NY rev (1m)0%
EPS NY rev (3m)5.3%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)1.89%
Revenue NY rev (1m)-0.11%
Revenue NY rev (3m)1.9%
Valuation
Industry RankSector Rank
PE 14.39
Fwd PE 9.69
P/S 3.54
P/FCF 12.59
P/OCF 11.91
P/B 0.89
P/tB 1.24
EV/EBITDA N/A
EPS(TTM)1.57
EY6.95%
EPS(NY)2.33
Fwd EY10.32%
FCF(TTM)1.8
FCFY7.94%
OCF(TTM)1.9
OCFY8.39%
SpS6.38
BVpS25.41
TBVpS18.22
PEG (NY)0.22
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 0.61%
ROE 5.01%
ROCE N/A
ROIC N/A
ROICexc N/A
ROICexgc N/A
OM N/A
PM (TTM) 19.95%
GM N/A
FCFM 28.14%
ROA(3y)0.88%
ROA(5y)0.93%
ROE(3y)7.5%
ROE(5y)7.93%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y-21.2%
PM growth 5Y-7.25%
GM growth 3YN/A
GM growth 5YN/A
F-Score5
Asset Turnover0.03
Health
Industry RankSector Rank
Debt/Equity 0.03
Debt/FCF 0.36
Debt/EBITDA N/A
Cap/Depr 210.92%
Cap/Sales 1.6%
Interest Coverage N/A
Cash Conversion N/A
Profit Quality 141.07%
Current Ratio N/A
Quick Ratio N/A
Altman-Z N/A
F-Score5
WACC7.37%
ROIC/WACCN/A
Cap/Depr(3y)261.13%
Cap/Depr(5y)215.76%
Cap/Sales(3y)2.49%
Cap/Sales(5y)2.33%
Profit Quality(3y)137.35%
Profit Quality(5y)123.16%
High Growth Momentum
Growth
EPS 1Y (TTM)18.05%
EPS 3Y-23.13%
EPS 5Y-7.49%
EPS Q2Q%206.25%
EPS Next Y65.96%
EPS Next 2Y37.17%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-11.07%
Revenue growth 3Y-3.38%
Revenue growth 5Y-1.36%
Sales Q2Q%18.42%
Revenue Next Year11.5%
Revenue Next 2Y9.07%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1YN/A
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-38.45%
FCF growth 3Y-2.83%
FCF growth 5Y-5.14%
OCF growth 1Y-41.12%
OCF growth 3Y-2.48%
OCF growth 5Y-6.96%