Banner (NASDAQ:BANR) vs. Pathfinder Bancorp (NASDAQ:PBHC) Critical Survey

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Banner	22.26%	10.46%	1.21%
Pathfinder Bancorp	-4.16%	-2.74%	-0.23%

Institutional and Insider Ownership

87.3% of Banner shares are held by institutional investors. Comparatively, 26.7% of Pathfinder Bancorp shares are held by institutional investors. 1.7% of Banner shares are held by company insiders. Comparatively, 15.4% of Pathfinder Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Banner has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, Pathfinder Bancorp has a beta of 0.12, suggesting that its stock price is 88% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Banner and Pathfinder Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banner	0	3	4	0	2.57
Pathfinder Bancorp	1	0	0	0	1.00

Banner currently has a consensus target price of $70.00, suggesting a potential upside of 10.50%. Given Banner’s stronger consensus rating and higher probable upside, research analysts clearly believe Banner is more favorable than Pathfinder Bancorp.

Earnings & Valuation

This table compares Banner and Pathfinder Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banner	$877.77 million	2.44	$195.38 million	$5.64	11.23
Pathfinder Bancorp	$79.15 million	0.85	-$1.93 million	($0.60)	-22.85

Banner has higher revenue and earnings than Pathfinder Bancorp. Pathfinder Bancorp 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 $2.00 per share and has a dividend yield of 3.2%. Pathfinder Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.9%. Banner pays out 35.5% of its earnings in the form of a dividend. Pathfinder Bancorp pays out -66.7% 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. Pathfinder Bancorp has raised its dividend for 1 consecutive years.

Summary

Banner beats Pathfinder Bancorp on 14 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 Pathfinder Bancorp

Pathfinder Bancorp, Inc. operates as a bank holding company for Pathfinder Bank that provides various banking and financial products and services in New York. The company's deposit products include checking, savings, and money market deposit accounts; certificates of deposit; and demand and time deposits. Its loan portfolio comprises commercial real estate, commercial, residential real estate, construction, and tax-exempt loans; home equity loans and junior liens; and consumer loans comprising automobile, recreational vehicles, and unsecured personal loans, as well as unsecured lines of credit and loans secured by deposit accounts. The company is also involved in the property, casualty, and life insurance brokerage business. It primarily serves individuals, families, small to mid-size businesses, and municipalities. The company was founded in 1859 and is headquartered in Oswego, New York.