Financial Survey: Banner (NASDAQ:BANR) and First Niles Financial (OTCMKTS:FNFI)

Banner (NASDAQ:BANR) and First Niles Financial (OTCMKTS:FNFI) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, dividends, institutional ownership, risk and earnings.

Insider and Institutional Ownership

87.3% of Banner shares are owned by institutional investors. 1.7% of Banner shares are owned by insiders. Comparatively, 23.4% of First Niles Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Banner and First Niles Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banner	0	4	3	0	2.43
First Niles Financial	0	0	0	0	0.00

Banner currently has a consensus target price of $71.17, indicating a potential upside of 11.08%. Given Banner’s stronger consensus rating and higher probable upside, equities analysts plainly believe Banner is more favorable than First Niles Financial.

Profitability

This table compares Banner and First Niles Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banner	21.80%	10.32%	1.17%
First Niles Financial	N/A	N/A	N/A

Dividends

Banner pays an annual dividend of $2.00 per share and has a dividend yield of 3.1%. First Niles Financial pays an annual dividend of $0.24 per share and has a dividend yield of 3.0%. Banner pays out 36.4% of its earnings in the form of a dividend. First Niles Financial pays out 400.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Banner is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Banner and First Niles Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banner	$832.99 million	2.62	$168.90 million	$5.49	11.67
First Niles Financial	$12.49 million	0.99	$860,000.00	$0.06	133.50

Banner has higher revenue and earnings than First Niles Financial. Banner is trading at a lower price-to-earnings ratio than First Niles Financial, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Banner has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, First Niles Financial has a beta of 0.29, meaning that its share price is 71% less volatile than the S&P 500.

Summary

Banner beats First Niles Financial on 14 of the 16 factors compared between the two stocks.

About Banner

Banner Corporation operates as the bank holding company for Banner Bank that engages in the provision of commercial banking and financial products and services to individuals, businesses, and public sector entities in the United States. It accepts various deposit instruments, including interest-bearing and non-interest-bearing checking accounts, money market deposit accounts, regular savings accounts, and certificates of deposit, as well as treasury management services and retirement savings plans. The company also provides commercial real estate loans, including owner-occupied, investment properties, and multifamily residential real estate loans; construction, land, and land development loans; one- to four-family residential real estate lending; commercial business loans; agricultural loans; consumer and other loans, such as home equity lines of credit, automobile, and boat and recreational vehicle loans, as well as loans secured by deposit accounts; and small business administration loans. In addition, it provides electronic and digital banking services comprising debit cards and ATMs, internet banking, remote deposit, and mobile banking services. The company was founded in 1890 and is based in Walla Walla, Washington.

About First Niles Financial

First Niles Financial, Inc. operates as a holding company for the Home Federal Savings and Loan Association of Niles that provides various banking products and services in Ohio, the United States. The company offers personal and business checking and savings, money market deposit, and Christmas club accounts, as well as certificates of deposit. It also provides various loans, including mortgage and consumer loans, home equity lines of credit, and commercial loans and lines of credit. In addition, the company provides e-statement, and night depository services; debit and ATM cards; safe deposit boxes; direct deposits; I.R.A. certificates of deposit and savings accounts; and online banking services. First Niles Financial, Inc. was founded in 1897 and is based in Niles, Ohio.