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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#2308
Positioning
Market Dominance
Finance, Insurance, And Real Estate
Banking
$813M
Jeffrey J. Deuel
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. As of January 27, 2022, it had a network of 49 banking offices located in Washington and Oregon. The company originates loans that are guaranteed by the U.S. Small Business Administration.
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Dates updated upon official exchange announcement.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = HFWA ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$SII SPROTT INC. | 75 | 91 | 87 | 98 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$PUK PRUDENTIAL PLC | 73 | 88 | 97 | 80 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$NMR NOMURA HOLDINGS INC | 72 | 81 | 92 | 87 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$PSLV Sprott Physical Silver Trust | 69 | 82 | 80 | 98 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$UFCS UNITED FIRE GROUP INC | 68 | 81 | 93 | 76 | 5.0x | 3.5x | 13.2% | 4.1% | 99.9% | 14.7% | 11.1% | 9.2% | 2.1% | 16.0x | $775M | VS | |
$SLF SUN LIFE FINANCIAL INC | 68 | 83 | 95 | 63 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$CBOE Cboe Global Markets, Inc. | 68 | 75 | 63 | 77 | 21.3x | 15.7x | 24.0% | 13.7% | 41.7% | 32.4% | 26.4% | 8.2% | 1.1% | 30.0x | $25.7B | VS | |
$VTMX Vesta Real Estate Corporation, S.A.B. de C.V. | 67 | 69 | 77 | 80 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$PHYS Sprott Physical Gold Trust | 67 | 64 | 82 | 91 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$GLDM World Gold Trust | 66 | 54 | 85 | 92 | 11.3x | 11.3x | - | 20.9% | 100.0% | 97.1% | 554.8% | -19.0% | 0.0% | - | $32.0B | VS | |
$HFWA HERITAGE FINANCIAL CORP /WA/ | 48 | 35 | 58 | 72 | 16.9x | 14.6x | 6.3% | 0.8% | 0.0% | 20.9% | 18.0% | 41.1% | 4.0% | 676.0x | $813M | ||
| SECTOR BENCH | - | - | - | - | - | 11.9x | 7.8x | 9.0% | 1.3% | 77.7% | 18.1% | 21.9% | 10.7% | 2.0% | 0.5x | - | REF |
HERITAGE FINANCIAL CORP /WA/ (HFWA) receives a "Reduce" rating with a composite score of 48.1/100. It ranks #2308 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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Outperforming peers — winners tend to keep winning over 3-12 months
Fair valuation relative to peers
Weak fundamentals — higher risk of value trap
Average volatility — neutral timing signal
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Finance, Insurance, And Real Estate sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for HFWA.
View All Ratings| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 35 | 67 | -32DRAG |
| MOMENTUM | 72 | 80 | -8DRAG |
| VALUATION | 58 | 80 | -22DRAG |
| INVESTMENT | 26 | 27 | -1NEUTRAL |
| STABILITY | 49 | 48 | +1NEUTRAL |
| SHORT INT | 27 | 14 | +13ALPHA |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC 12.9% vs WACC 9.3% (spread +3.6%)
GM 0% vs sector 78%, OM 21% vs sector 18%
Capital turnover 0.92x
Rev growth 41%, 10yr history
Interest coverage 1.0x, Net debt/EBITDA 3.9x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
We rate HERITAGE FINANCIAL CORP /WA/ (HFWA) as a Reduce with a composite score of 48.1/100 at a current price of $27.11. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential.
HERITAGE FINANCIAL CORP /WA/ holds a top-quartile position (#0 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 48.1/100 places it at rank #2308 in our full universe.
The near-term outlook is constructive, with revenue growing at 41% and momentum in the 72th percentile confirming positive market sentiment. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy.
No Moat
High
Poor
Fair Value
Positive momentum indicates institutional accumulation.
Stable competitive position in a defensive sector.
Leverage of 676% D/E amplifies downside risk.
Below-average quality raises earnings sustainability concerns.
Vulnerability to macroeconomic shocks and interest rate volatility.
HERITAGE FINANCIAL CORP /WA/ represents a reduce based on multi-factor quantitative performance.
HERITAGE FINANCIAL CORP /WA/ receives a Reduce rating from our analysis, with a composite score of 48.1/100 and 2 out of 5 stars, ranking #2308 out of 7,333 stocks. HFWA's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
HFWA's quality score of 35/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of 6.3% (sector avg: 9.0%), gross margins of 0.0% (sector avg: 77.7%), net margins of 18.0% (sector avg: 21.9%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
HFWA's value score of 58/100 indicates the stock is fairly valued based on its current fundamentals. Key valuation metrics include a P/E ratio of 16.93x, an EV/EBITDA of 14.55x, a P/B ratio of 1.06x. At this level, neither a clear bargain nor overpriced, the stock's attractiveness depends more on forward growth expectations and qualitative factors.
HERITAGE FINANCIAL CORP /WA/'s investment score of 26/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of 41.1% vs. a sector average of 10.7% and a return on assets of 0.8% (sector: 1.3%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
HFWA shows strong momentum characteristics with a score of 72/100. The stock has been trending above key moving averages, indicating solid demand from institutional buyers. Revenue growth stands at 41.1% year-over-year, while a beta of 0.76 reflects its sensitivity to broader market moves. This level of momentum typically signals sustained investor confidence and favorable near-term price action.
With a stability score of 49/100, HFWA exhibits average financial resilience. Key stability metrics include a beta of 0.76 and a debt-to-equity ratio of 676.00x (sector avg: 0.5x). While the balance sheet is not a major concern, the stock is subject to typical market volatility and may experience sharper drawdowns during risk-off episodes.
HERITAGE FINANCIAL CORP /WA/'s short interest score of 27/100 reveals significant bearish positioning, suggesting institutional investors are actively betting against the stock. Specific risk factors include elevated leverage (D/E: 676.00x), small-cap liquidity risk. At $813M (small-cap), HFWA carries meaningful risk and is best suited for investors with high risk tolerance who have thoroughly evaluated the bear thesis.
HFWA pays a solid dividend yield of 4.0%, contributing an income component to total returns. This compares to a sector average dividend yield of 2.0%. This moderate yield suggests a balance between returning capital to shareholders and retaining earnings for reinvestment — a common profile among quality compounders.
HERITAGE FINANCIAL CORP /WA/ is a small-cap company in the Finance, Insurance, And Real Estate sector, ranked #0 of 50 in its sector (100th percentile) and #2308 of 7,333 overall (69th percentile). Key comparisons include ROE of 6.3% trailing the 9.0% sector median and operating margins of 20.9% above the 18.1% sector average. This top-quartile standing reflects exceptional competitive strength relative to Finance, Insurance, And Real Estate peers.
While HFWA currently exhibits a REDUCE profile, superior opportunities exist within the FINANCE, INSURANCE, AND REAL ESTATE sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
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Improvement in Investment (26) would have the largest impact on the composite score.
EV/EBITDA 87% ABOVE SECTOR MEDIAN
ROE 30% BELOW SECTOR MEDIAN
Gross Margin 100% BELOW SECTOR MEDIAN

Law firm Monteverde & Associates is investigating potential class action lawsuits related to mergers involving Heritage Financial, Anywhere Real Estate, Compass, and CSG Systems International.

Several companies reported quarterly earnings, with mixed results. Costco beat estimates, while Concentrix reported weaker-than-expected earnings and guidance. Heritage Financial announced an acquisition, and Inventiva and LightPath Technologies also shared financial updates.

Although the revenue and EPS for Heritage Financial (HFWA) give a sense of how its business performed in the quarter ended March 2024, it might be worth considering how some key metrics compare with Wall Street estimates and the year-ago numbers.

Thirteen new dividend increases expected this week, mainly from regional banks. Click here for a detailed analysis.
Above 50MA
37.18%
Net New Highs
+51081