Banner (NASDAQ: BANR) and SunTrust Banks (NYSE:STI) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, earnings, analyst recommendations and profitability.
Valuation & Earnings
This table compares Banner and SunTrust Banks’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Banner||$505.82 million||3.74||$60.77 million||$1.84||31.48|
|SunTrust Banks||$9.74 billion||3.41||$2.27 billion||$4.48||15.82|
Banner pays an annual dividend of $1.00 per share and has a dividend yield of 1.7%. SunTrust Banks pays an annual dividend of $1.60 per share and has a dividend yield of 2.3%. Banner pays out 54.3% of its earnings in the form of a dividend. SunTrust Banks pays out 35.7% 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. Banner has raised its dividend for 5 consecutive years. SunTrust Banks is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Banner and SunTrust Banks’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility & Risk
Banner has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, SunTrust Banks has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500.
Insider & Institutional Ownership
92.1% of Banner shares are held by institutional investors. Comparatively, 83.6% of SunTrust Banks shares are held by institutional investors. 1.7% of Banner shares are held by company insiders. Comparatively, 0.5% of SunTrust Banks shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
This is a breakdown of recent recommendations and price targets for Banner and SunTrust Banks, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Banner presently has a consensus price target of $58.67, suggesting a potential upside of 1.27%. SunTrust Banks has a consensus price target of $68.93, suggesting a potential downside of 2.74%. Given Banner’s higher probable upside, equities research analysts plainly believe Banner is more favorable than SunTrust Banks.
SunTrust Banks beats Banner on 11 of the 17 factors compared between the two stocks.
Banner Company Profile
Banner Corporation is a bank holding company. The Company is engaged in the business of planning, directing and coordinating the business activities of its subsidiaries, Banner Bank and Islanders Bank. Banner Bank is a Washington-chartered commercial bank. Banner Bank is a regional bank, which offers a range of commercial banking services and financial products to individuals, businesses and public sector entities in its primary market areas. Banner Bank is also an active participant in the secondary market, engaging in mortgage banking operations through the origination and sale of one- to four-family and multi-family residential loans. Islanders Bank is also a Washington-chartered commercial bank. Islanders Bank is a community bank, which offers similar banking services to individuals, businesses and public entities located primarily in the San Juan Islands. The Banks’ primary business is that of traditional banking institutions, accepting deposits and originating loans.
SunTrust Banks Company Profile
SunTrust Banks, Inc. is a provider of financial services. The Company’s principal subsidiary is SunTrust Bank (the Bank). The Company’s business segments include Consumer Banking and Private Wealth Management, Wholesale Banking, Mortgage Banking and Corporate Other. As of December 31, 2016, the Consumer Banking and Private Wealth Management segment consisted of three primary businesses: Consumer Banking, Consumer Lending and Private Wealth Management. The Wholesale Banking segment includes the operations of the Corporate and investment banking (CIB), Commercial and Business Banking, Commercial Real Estate, and Treasury and Payment Solutions businesses. The Mortgage Banking segment offers residential mortgage products nationally through its retail and correspondent channels, the Internet (www.suntrust.com) and by telephone. The Bank provides clients with a selection of full-, self- and assisted-service channels, including branch, call center, Teller Connect machines, mobile and tablet.
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