Contrasting ACNB (NASDAQ:ACNB) and Heritage Commerce (NASDAQ:HTBK)

ACNB (NASDAQ:ACNB) and Heritage Commerce (NASDAQ:HTBK) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Volatility & Risk

ACNB has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500. Comparatively, Heritage Commerce has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.

Valuation & Earnings

This table compares ACNB and Heritage Commerce”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ACNB	$108.34 million	4.02	$31.85 million	$3.73	11.09
Heritage Commerce	$172.40 million	3.43	$40.53 million	$0.66	14.58

Heritage Commerce has higher revenue and earnings than ACNB. ACNB is trading at a lower price-to-earnings ratio than Heritage Commerce, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and target prices for ACNB and Heritage Commerce, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ACNB	0	0	4	0	3.00
Heritage Commerce	0	0	2	1	3.33

ACNB currently has a consensus price target of $48.75, suggesting a potential upside of 17.90%. Heritage Commerce has a consensus price target of $11.50, suggesting a potential upside of 19.54%. Given Heritage Commerce’s stronger consensus rating and higher possible upside, analysts clearly believe Heritage Commerce is more favorable than ACNB.

Dividends

ACNB pays an annual dividend of $1.28 per share and has a dividend yield of 3.1%. Heritage Commerce pays an annual dividend of $0.52 per share and has a dividend yield of 5.4%. ACNB pays out 34.3% of its earnings in the form of a dividend. Heritage Commerce pays out 78.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

32.3% of ACNB shares are owned by institutional investors. Comparatively, 75.6% of Heritage Commerce shares are owned by institutional investors. 3.6% of ACNB shares are owned by company insiders. Comparatively, 4.0% of Heritage Commerce shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares ACNB and Heritage Commerce’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ACNB	24.09%	10.91%	1.31%
Heritage Commerce	16.12%	5.96%	0.76%

Summary

Heritage Commerce beats ACNB on 10 of the 17 factors compared between the two stocks.

About ACNB

ACNB Corporation, a financial holding company, offers banking, insurance, and financial services to individual, business, and government customers in the United States. The company provides checking, savings, and money market deposit accounts, as well as time deposits and debit cards. It also offers commercial lending products, such as commercial mortgages, real estate development and construction loans, accounts receivable and inventory financing, and agricultural and governmental loans; consumer lending products, including home equity loans and lines of credit, automobile and recreational vehicle loans, manufactured housing loans, and personal lines of credit; and mortgage lending programs include personal residential mortgages, and residential construction and investment mortgage loans. In addition, the company provides other services that are related to testamentary trusts, life insurance trusts, charitable remainder trusts, guardianships, powers of attorney, custodial accounts, and investment management and advisory accounts; and retail brokerage services. Further, it acts as a trustee to invest in, protect, manage, and distribute financial assets. Additionally, the company offers property and casualty, health, life, and disability insurance products to commercial and personal clients; and online, telephone, and mobile banking, as well as automated teller machine services. ACNB Corporation was founded in 1857 and is headquartered in Gettysburg, Pennsylvania.

About Heritage Commerce

Heritage Commerce Corp operates as the bank holding company for Heritage Bank of Commerce that provides various commercial and personal banking services to residents and the business/professional community in California. Its deposit products for business banking and retail markets include interest and non-interest-bearing demand, savings, and money market accounts, as well as certificates of deposit and time deposits. The company’s loan portfolio comprises commercial loans, such as operating secured and unsecured loans advanced for working capital, equipment purchases, and other business purposes; commercial real estate loans; commercial construction loans for rental properties, commercial buildings, and homes; small business administration loans; home equity lines of credit; multifamily loans on residential properties; residential mortgage loans; and consumer loans consisting of loans for financing automobiles, various consumer goods, and other personal purposes. In addition, it offers other banking services, including cashier’s checks, bank by mail, night depositories, safe deposit boxes, direct deposit, automated payroll, electronic funds transfer, online bill pay, homeowner association, remote deposit capture, automated clearing house origination, electronic data interchange, and check imaging services, as well as other customary banking, factoring financing, and electronic banking services. Heritage Commerce Corp was founded in 1994 and is headquartered in San Jose, California.