Comparing Bank OZK (NASDAQ:OZK) & Banner (NASDAQ:BANR)

Bank OZK (NASDAQ:OZK) and Banner (NASDAQ:BANR) are both mid-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, valuation, institutional ownership, profitability, earnings and dividends.

Institutional & Insider Ownership

86.2% of Bank OZK shares are held by institutional investors. Comparatively, 87.3% of Banner shares are held by institutional investors. 6.7% of Bank OZK shares are held by company insiders. Comparatively, 1.6% of Banner shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

Bank OZK has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, Banner has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500.

Dividends

Bank OZK pays an annual dividend of $1.60 per share and has a dividend yield of 3.5%. Banner pays an annual dividend of $1.92 per share and has a dividend yield of 3.2%. Bank OZK pays out 26.8% of its earnings in the form of a dividend. Banner pays out 39.9% 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. Bank OZK has increased its dividend for 28 consecutive years. Bank OZK is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Bank OZK and Banner, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank OZK	2	5	1	0	1.88
Banner	0	3	3	0	2.50

Bank OZK currently has a consensus target price of $46.29, indicating a potential upside of 0.36%. Banner has a consensus target price of $54.00, indicating a potential downside of 9.26%. Given Bank OZK’s higher probable upside, equities research analysts plainly believe Bank OZK is more favorable than Banner.

Earnings & Valuation

This table compares Bank OZK and Banner’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank OZK	$1.60 billion	3.28	$690.78 million	$5.97	7.73
Banner	$745.98 million	2.75	$183.62 million	$4.81	12.37

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

Profitability

This table compares Bank OZK and Banner’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank OZK	27.04%	14.50%	2.01%
Banner	20.93%	10.89%	1.14%

Summary

Bank OZK beats Banner on 13 of the 17 factors compared between the two stocks.

About Bank OZK

Bank OZK provides various retail and commercial banking services for individuals and businesses in the United States. The company offers deposit services, including non-interest bearing checking, interest bearing transaction, business sweep, savings, money market, individual retirement, and other accounts, as well as time and reciprocal deposits. It also provides trust and wealth services, such as personal trusts, custodial accounts, investment management accounts, and retirement accounts, as well as corporate trust services, including trustee, paying agent and registered transfer agent services, and other related services. In addition, the company offers treasury management services comprising automated clearing house, wire transfer, transaction reporting, wholesale lockbox, remote deposit capture, automated credit line transfer, reconciliation, positive pay, commercial card, and other services, as well as zero balance and investment sweep accounts. Further, it provides real estate, consumer, small business, indirect recreational vehicle and marine, equipment, agricultural, commercial and industrial, government guaranteed, lines of credit, homebuilder, and affordable housing loans; lender and structured, business aviation, and subscription financing services; and mortgage and other lending products. Additionally, the company offers ATMs; telephone, online, and mobile banking services; credit and debit cards; safe deposit boxes; and other products and services. The company was formerly known as Bank of the Ozarks and changed its name to Bank OZK in July 2018. Bank OZK was founded in 1903 and is headquartered in Little Rock, Arkansas.

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.