Head to Head Comparison: Banner (NASDAQ:BANR) versus 1st Source (NASDAQ:SRCE)

Banner (NASDAQ:BANR) and 1st Source (NASDAQ:SRCE) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, valuation, profitability, dividends, risk and analyst recommendations.

Volatility & Risk

Banner has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500. Comparatively, 1st Source has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500.

Valuation & Earnings

This table compares Banner and 1st Source”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banner	$595.20 million	3.41	$183.62 million	$4.81	12.23
1st Source	$507.53 million	2.81	$124.93 million	$4.97	11.71

Banner has higher revenue and earnings than 1st Source. 1st Source is trading at a lower price-to-earnings ratio than Banner, indicating that it is currently the more affordable of the two stocks.

Dividends

Banner pays an annual dividend of $1.92 per share and has a dividend yield of 3.3%. 1st Source pays an annual dividend of $1.44 per share and has a dividend yield of 2.5%. Banner pays out 39.9% of its earnings in the form of a dividend. 1st Source pays out 29.0% 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. 1st Source has increased its dividend for 37 consecutive years.

Profitability

This table compares Banner and 1st Source’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banner	20.93%	10.89%	1.14%
1st Source	23.23%	12.02%	1.47%

Insider & Institutional Ownership

87.3% of Banner shares are held by institutional investors. Comparatively, 74.5% of 1st Source shares are held by institutional investors. 1.6% of Banner shares are held by insiders. Comparatively, 19.3% of 1st Source shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Banner and 1st Source, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banner	0	3	3	0	2.50
1st Source	0	2	0	0	2.00

Banner presently has a consensus price target of $54.00, indicating a potential downside of 8.21%. 1st Source has a consensus price target of $64.75, indicating a potential upside of 11.24%. Given 1st Source’s higher possible upside, analysts clearly believe 1st Source is more favorable than Banner.

Summary

Banner beats 1st Source on 9 of the 17 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 1st Source

1st Source Corporation operates as the bank holding company for 1st Source Bank that provides commercial and consumer banking services, trust and wealth advisory services, and insurance products to individual and business clients. Its consumer banking services include checking and savings accounts; certificates of deposit; individual retirement accounts; online and mobile banking products; consumer loans, real estate mortgage loans, and home equity lines of credit; and financial planning, financial literacy, and other consultative services, as well as debit and credit cards. The company also offers commercial, small business, agricultural, and real estate loans for general corporate purposes, including financing for industrial and commercial properties, equipment, inventories, accounts receivables, and renewable energy and acquisition financing; and commercial leasing, treasury management, and retirement planning services. In addition, it provides trust, investment, agency, and custodial services comprising administration of estates and personal trusts, as well as management of investment accounts for individuals, employee benefit plans, and charitable foundations. Further, the company offers equipment loan and lease products for construction equipment, new and pre-owned aircraft, auto and light trucks, and medium and heavy duty trucks; and finances construction equipment, aircrafts, medium and heavy duty trucks, step vans, vocational work trucks, motor coaches, shuttle buses, funeral cars, automobiles, and other equipment. Additionally, it provides corporate and personal property, casualty, and individual and group health and life insurance products and services. 1st Source Corporation was founded in 1863 and is headquartered in South Bend, Indiana.