FSBW vs HFWA

For growth investors, FS Bancorp, Inc.

(FSBW) is the stronger pick with 6. 8% revenue growth year-over-year, versus 5. 9% for Heritage Financial Corporation (HFWA). FS Bancorp, Inc. (FSBW) offers the better valuation at 9. 7x trailing P/E (9. 2x forward), making it the more compelling value choice. Analysts rate Heritage Financial Corporation (HFWA) a "Buy" — based on 14 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, FS Bancorp, Inc.

(FSBW) is the cheapest at 9. 7x versus Heritage Financial Corporation at 14. 0x. On forward P/E, FS Bancorp, Inc. is actually cheaper at 9. 2x.

Over the past 5 years, FS Bancorp, Inc.

(FSBW) delivered a total return of +33. 8%, compared to +10. 4% for Heritage Financial Corporation (HFWA). Over 10 years, the gap is even starker: FSBW returned +288. 9% versus HFWA's +109. 7%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), FS Bancorp, Inc.

(FSBW) is the lower-risk stock at 0. 74β versus Heritage Financial Corporation's 0. 97β — meaning HFWA is approximately 32% more volatile than FSBW relative to the S&P 500. On balance sheet safety, Heritage Financial Corporation (HFWA) carries a lower debt/equity ratio of 5% versus 46% for FS Bancorp, Inc. — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), FS Bancorp, Inc.

(FSBW) is pulling ahead at 6. 8% versus 5. 9% for Heritage Financial Corporation (HFWA). On earnings-per-share growth, the picture is similar: Heritage Financial Corporation grew EPS 58. 1% year-over-year, compared to -1. 8% for FS Bancorp, Inc.. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

Heritage Financial Corporation (HFWA) is the more profitable company, earning 20.

1% net margin versus 15. 3% for FS Bancorp, Inc. — meaning it keeps 20. 1% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: HFWA leads at 23. 2% versus 20. 6% for FSBW. At the gross margin level — before operating expenses — HFWA leads at 72. 4%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

On forward earnings alone, FS Bancorp, Inc.

(FSBW) trades at 9. 2x forward P/E versus 13. 3x for Heritage Financial Corporation — 4. 1x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for HFWA: 14. 3% to $31. 33.

All stocks in this comparison pay dividends.

Heritage Financial Corporation (HFWA) offers the highest yield at 3. 5%, versus 3. 2% for FS Bancorp, Inc. (FSBW).

For long-horizon retirement investors, FS Bancorp, Inc.

(FSBW) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0. 74), 3. 2% yield, +288. 9% 10Y return). Both have compounded well over 10 years (FSBW: +288. 9%, HFWA: +109. 7%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Financial Services sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.