Head to Head Comparison: Banner (NASDAQ:BANR) vs. Hilltop (NYSE:HTH)

Hilltop (NYSE:HTH) and Banner (NASDAQ:BANR) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, earnings, risk, valuation, analyst recommendations and institutional ownership.

Risk & Volatility

Hilltop has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500. Comparatively, Banner has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500.

Institutional & Insider Ownership

57.1% of Hilltop shares are owned by institutional investors. Comparatively, 87.3% of Banner shares are owned by institutional investors. 29.9% of Hilltop shares are owned by insiders. Comparatively, 1.7% of Banner shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hilltop	$1.16 billion	1.71	$113.21 million	$1.97	15.63
Banner	$618.20 million	3.62	$168.90 million	$5.09	12.72

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

Analyst Recommendations

This is a summary of current ratings and price targets for Hilltop and Banner, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hilltop	0	3	0	0	2.00
Banner	0	2	4	0	2.67

Hilltop presently has a consensus price target of $33.00, indicating a potential upside of 7.18%. Banner has a consensus price target of $70.83, indicating a potential upside of 9.38%. Given Banner’s stronger consensus rating and higher possible upside, analysts clearly believe Banner is more favorable than Hilltop.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hilltop	7.04%	5.18%	0.71%
Banner	20.28%	10.03%	1.09%

Dividends

Hilltop pays an annual dividend of $0.72 per share and has a dividend yield of 2.3%. Banner pays an annual dividend of $1.92 per share and has a dividend yield of 3.0%. Hilltop pays out 36.5% of its earnings in the form of a dividend. Banner pays out 37.7% 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. Hilltop has increased its dividend for 8 consecutive years.

Summary

Banner beats Hilltop on 12 of the 17 factors compared between the two stocks.

About Hilltop

Hilltop Holdings Inc. provides business and consumer banking services. It operates through three segments: Banking, Broker-Dealer, and Mortgage Origination. The Banking segment offers savings, checking, interest-bearing checking, and money market accounts; certificates of deposit; lines and letters of credit, home improvement and equity loans, loans for purchasing and carrying securities, term, agricultural and commercial real estate, equipment loans, and other lending products; and mortgage, commercial and industrial loans, and term and construction finance. It also provides treasury management, asset management, check cards, safe deposit boxes, online banking, bill pay, and overdraft privilege services; and estate planning, management and administration, investment portfolio management, employee benefit accounts, and individual retirement accounts services, as well as automated teller machines. The Broker-Dealer segment offers public finance services that assist public entities in originating, syndicating, and distributing securities of municipalities and political subdivisions; specialized advisory and investment banking services; advice and guidance to arbitrage rebate compliance, portfolio management, and local government investment pool administration; advisory services and products for derivatives and commodities; agricultural insurance; and sells, trades in, and underwrites U.S. government and government agency bonds, corporate bonds, and municipal bonds; mortgage-backed, asset-backed, and commercial mortgage-backed securities and structured products; and provides asset and liability management advisory, clearing, retail, and securities lending services. The Mortgage Origination segment offers fixed and adjustable rate mortgages, jumbo, new construction, Federal Housing Administration, Veterans Affairs, and United States Department of Agriculture loans. Hilltop Holdings Inc. was incorporated in 1998 and is based in Dallas, Texas.

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.