Heartland Financial USA (NASDAQ:HTLF) versus Five Star Bancorp (NASDAQ:FSBC) Head to Head Survey

Heartland Financial USA (NASDAQ:HTLFGet Rating) and Five Star Bancorp (NASDAQ:FSBCGet Rating) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, analyst recommendations, profitability, risk and earnings.

Dividends

Heartland Financial USA pays an annual dividend of $1.08 per share and has a dividend yield of 2.6%. Five Star Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 2.4%. Heartland Financial USA pays out 22.0% of its earnings in the form of a dividend. Five Star Bancorp pays out 23.5% 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. Heartland Financial USA has raised its dividend for 5 consecutive years. Heartland Financial USA is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

63.2% of Heartland Financial USA shares are owned by institutional investors. Comparatively, 37.1% of Five Star Bancorp shares are owned by institutional investors. 3.8% of Heartland Financial USA shares are owned by insiders. Comparatively, 27.7% of Five Star Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Heartland Financial USA and Five Star Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Heartland Financial USA $717.70 million 2.46 $219.92 million $4.92 8.47
Five Star Bancorp $88.86 million 4.85 $42.44 million $2.55 9.80

Heartland Financial USA has higher revenue and earnings than Five Star Bancorp. Heartland Financial USA is trading at a lower price-to-earnings ratio than Five Star Bancorp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Heartland Financial USA and Five Star Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Heartland Financial USA 30.31% 11.02% 1.16%
Five Star Bancorp 45.14% 18.45% 1.66%

Analyst Ratings

This is a summary of recent ratings and target prices for Heartland Financial USA and Five Star Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Heartland Financial USA 0 0 2 0 3.00
Five Star Bancorp 0 0 1 0 3.00

Heartland Financial USA presently has a consensus target price of $60.00, suggesting a potential upside of 44.06%. Five Star Bancorp has a consensus target price of $29.00, suggesting a potential upside of 16.00%. Given Heartland Financial USA’s higher possible upside, research analysts clearly believe Heartland Financial USA is more favorable than Five Star Bancorp.

Summary

Heartland Financial USA beats Five Star Bancorp on 9 of the 15 factors compared between the two stocks.

About Heartland Financial USA (Get Rating)

Heartland Financial USA, Inc., a multi-bank holding company, provides commercial, small business, and consumer banking services to individuals and businesses in the United States. It accepts various deposit products, including checking and other demand deposit accounts; NOW, savings, money market, individual retirement, and health savings accounts; certificates of deposit; and other time deposits. The company also offers commercial and industrial loans; commercial real estate loans; real estate mortgage loans; small business loans; agricultural loans; consumer loans comprising motor vehicle and home improvement loans, home equity line of credit, and fixed rate home equity and personal lines of credit; and credit cards for commercial, business, and personal use. In addition, it provides online banking, mobile banking, telephone banking, bill payment, automated clearing house, wire transfer, zero balance account, transaction reporting, lock box, remote deposit capture, accounts receivable, investment sweep account, reconciliation, treasury management, wealth management, trust, foreign exchange, and various fraud prevention services, such as check and electronic positive pay, as well as commercial purchasing and merchant credit cards, debit cards, and automated teller machines. Further, the company offers investment services, such as mutual funds, annuities, retirement products, education savings products, and brokerage services, as well as vehicle, property and casualty, and life and disability insurance products. Additionally, it is involved in the community development, consumer finance, multi-line insurance agency, and property management businesses. The company operates through 129 banking locations in Iowa, Illinois, Wisconsin, New Mexico, Arizona, Montana, Colorado, Minnesota, Kansas, Missouri, Texas, and California. Heartland Financial USA, Inc. was founded in 1981 and is headquartered in Dubuque, Iowa.

About Five Star Bancorp (Get Rating)

Five Star Bancorp operates as the bank holding company for Five Star Bank that provides a range of banking products and services to small and medium-sized businesses, professionals, and individuals. The company accepts various deposits, such as money market, noninterest-bearing and interest checking accounts, savings accounts, and time deposits. Its loan products include commercial and residential real estate loans; commercial loans; commercial land loans; farmland loans; commercial and residential construction loans; and consumer and other loans. The company also offers debit cards; and remote deposit capture, online and mobile banking, and direct deposit services. It operates through seven branch offices and two loan production offices in Northern California. Five Star Bancorp was founded in 1999 and is headquartered in Rancho Cordova, California.

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