Contrasting Banner (NASDAQ:BANR) and S&T Bancorp (NASDAQ:STBA)

S&T Bancorp (NASDAQ:STBAGet Rating) and Banner (NASDAQ:BANRGet Rating) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.

Earnings and Valuation

This table compares S&T Bancorp and Banner’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
S&T Bancorp $353.87 million 3.18 $110.34 million $2.74 10.46
Banner $616.92 million 3.23 $201.05 million $5.71 10.16

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

Profitability

This table compares S&T Bancorp and Banner’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
S&T Bancorp 30.99% 9.00% 1.14%
Banner 32.46% 12.47% 1.24%

Risk & Volatility

S&T Bancorp has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500. Comparatively, Banner has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500.

Dividends

S&T Bancorp pays an annual dividend of $1.20 per share and has a dividend yield of 4.2%. Banner pays an annual dividend of $1.76 per share and has a dividend yield of 3.0%. S&T Bancorp pays out 43.8% of its earnings in the form of a dividend. Banner pays out 30.8% 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. S&T Bancorp has increased its dividend for 2 consecutive years and Banner has increased its dividend for 1 consecutive years. S&T Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent recommendations for S&T Bancorp and Banner, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
S&T Bancorp 0 3 1 0 2.25
Banner 0 2 0 1 2.67

S&T Bancorp currently has a consensus target price of $30.23, suggesting a potential upside of 5.50%. Banner has a consensus target price of $65.33, suggesting a potential upside of 12.60%. Given Banner’s stronger consensus rating and higher probable upside, analysts plainly believe Banner is more favorable than S&T Bancorp.

Insider and Institutional Ownership

61.1% of S&T Bancorp shares are owned by institutional investors. Comparatively, 85.0% of Banner shares are owned by institutional investors. 1.5% of S&T Bancorp shares are owned by insiders. Comparatively, 1.5% of Banner shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Banner beats S&T Bancorp on 14 of the 18 factors compared between the two stocks.

About S&T Bancorp (Get Rating)

S&T Bancorp, Inc. operates as the bank holding company for S&T Bank that provides retail and commercial banking products and services. The company operates through six segments: Commercial Real Estate, Commercial and Industrial, Business Banking, Commercial Construction, Consumer Real Estate, and Other Consumer. The company accepts time and demand deposits; and offers commercial and consumer loans, cash management services, and brokerage and trust services, as well as acts as guardian and custodian of employee benefits. It also manages private investment accounts for individuals and institutions. In addition, the company distributes life insurance and long-term disability income insurance products, as well as offers title insurance agency services to commercial customers; and acts as a reinsurer of credit life, accident, and health insurance policies. As of December 31, 2021, it operated 73 banking branches and 5 loan production offices located in Western Pennsylvania, Eastern Pennsylvania, Northeast Ohio, Central Ohio, and Upstate New York. S&T Bancorp, Inc. was founded in 1902 and is headquartered in Indiana, Pennsylvania.

About Banner (Get Rating)

Banner Corporation operates as the bank holding company for Banner Bank that provide 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; residential mortgage loans; commercial business loans; agricultural loans; and 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. In addition, it engages in the mortgage banking operations through the origination and sale of one-to four-family and multi-family residential loans, as well as small business administration loans. Further, the company provides electronic and digital banking services. As of December 31, 2021, it operated 150 branch offices and 18 loan production offices located in Washington, Oregon, California, Idaho, and Utah. Banner Corporation was founded in 1890 and is headquartered in Walla Walla, Washington.

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