Reviewing Banner (BANR) and Banco Macro (BMA)

Banner (NASDAQ: BANR) and Banco Macro (NYSE:BMA) are both financials companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Profitability

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

Net Margins Return on Equity Return on Assets
Banner 12.02% 7.55% 0.98%
Banco Macro 19.37% 26.26% 4.52%

Risk & Volatility

Banner has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, Banco Macro has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Banner and Banco Macro, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Banner 0 4 1 0 2.20
Banco Macro 0 3 1 0 2.25

Banner currently has a consensus price target of $58.67, suggesting a potential upside of 10.59%. Banco Macro has a consensus price target of $113.70, suggesting a potential upside of 18.97%. Given Banco Macro’s stronger consensus rating and higher possible upside, analysts clearly believe Banco Macro is more favorable than Banner.

Dividends

Banner pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. Banco Macro pays an annual dividend of $0.75 per share and has a dividend yield of 0.8%. Banner pays out 54.6% of its earnings in the form of a dividend. Banco Macro pays out 12.1% 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.

Insider and Institutional Ownership

91.5% of Banner shares are held by institutional investors. Comparatively, 29.8% of Banco Macro shares are held by institutional investors. 1.7% of Banner shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Banner and Banco Macro’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Banner $505.82 million 3.43 $60.77 million $1.83 28.99
Banco Macro $2.51 billion 2.51 $442.81 million $6.22 15.38

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

Summary

Banco Macro beats Banner on 10 of the 15 factors compared between the two stocks.

About Banner

Banner Corporation is a bank holding company. The Company is engaged in the business of planning, directing and coordinating the business activities of its subsidiaries, Banner Bank and Islanders Bank. Banner Bank is a Washington-chartered commercial bank. Banner Bank is a regional bank, which offers a range of commercial banking services and financial products to individuals, businesses and public sector entities in its primary market areas. Banner Bank is also an active participant in the secondary market, engaging in mortgage banking operations through the origination and sale of one- to four-family and multi-family residential loans. Islanders Bank is also a Washington-chartered commercial bank. Islanders Bank is a community bank, which offers similar banking services to individuals, businesses and public entities located primarily in the San Juan Islands. The Banks’ primary business is that of traditional banking institutions, accepting deposits and originating loans.

About Banco Macro

Banco Macro SA is an Argnetina-based financial institution (the Bank) that offers traditional bank products and services to companies, including those operating in regional economies, as well as to individuals. In addition, the Bank performs certain transactions through its subsidiaries, including mainly Banco del Tucuman, Macro Bank Ltd, Macro Securities SA, Macro Fiducia SA and Macro Fondos SGFCI SA. It has approximately two categories of customers, such as retail customers, including individuals and entrepreneurs and corporate customers, which include small, medium and large companies and major corporations. In addition, it provides services to over four provincial governments. It provides its corporate customers with traditional banking products and services, such as deposits, lending (including overdraft facilities), check cashing advances and factoring, guaranteed loans and credit lines for financing foreign trade and cash management services.

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