Head to Head Review: Banner (NASDAQ:BANR) vs. Timberland Bancorp (NASDAQ:TSBK)

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

Insider and Institutional Ownership

65.5% of Timberland Bancorp shares are owned by institutional investors. Comparatively, 87.3% of Banner shares are owned by institutional investors. 3.7% of Timberland Bancorp shares are owned by insiders. Comparatively, 1.7% of Banner shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Timberland Bancorp pays an annual dividend of $1.04 per share and has a dividend yield of 3.0%. Banner pays an annual dividend of $1.92 per share and has a dividend yield of 2.9%. Timberland Bancorp pays out 30.6% of its earnings in the form of a dividend. Banner pays out 36.6% 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. Timberland Bancorp has increased its dividend for 13 consecutive years. Timberland Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current recommendations for Timberland Bancorp and Banner, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Timberland Bancorp	0	0	0	0	0.00
Banner	0	2	3	0	2.60

Banner has a consensus target price of $70.17, suggesting a potential upside of 7.70%. Given Banner’s stronger consensus rating and higher probable upside, analysts clearly believe Banner is more favorable than Timberland Bancorp.

Risk & Volatility

Timberland Bancorp has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500. Comparatively, Banner has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500.

Valuation and Earnings

This table compares Timberland Bancorp 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
Timberland Bancorp	$75.33 million	3.59	$24.28 million	$3.40	10.06
Banner	$832.99 million	2.70	$168.90 million	$5.25	12.41

Banner has higher revenue and earnings than Timberland Bancorp. Timberland Bancorp 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 Timberland Bancorp and Banner’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Timberland Bancorp	24.19%	10.79%	1.40%
Banner	21.15%	10.06%	1.13%

Summary

Banner beats Timberland Bancorp on 9 of the 17 factors compared between the two stocks.

About Timberland Bancorp

Timberland Bancorp, Inc. operates as the bank holding company for Timberland Bank that provides various community banking services in Washington. It offers various deposit products, including money market deposit, checking, and regular savings accounts, as well as certificates of deposit. The company also provides one-to four-family residential, multi-family, and commercial real estate loans; and construction lending products, such as custom and owner/builder, speculative one- to four-family, commercial, multi-family, land development, and land development. In addition, it offers consumer loans comprising home equity lines of credit and second mortgage loans, automobile loans, boat loans, motorcycle loans, recreational vehicle loans, savings account loans, and unsecured loans; and commercial business loans. Timberland Bancorp, Inc. was founded in 1915 and is headquartered in Hoquiam, Washington.

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.