Contrasting Banner (NASDAQ:BANR) and Sturgis Bancorp (OTCMKTS:STBI)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Banner	23.24%	10.77%	1.26%
Sturgis Bancorp	13.20%	N/A	N/A

Volatility & Risk

Banner has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Sturgis Bancorp has a beta of 0.17, suggesting that its share price is 83% less volatile than the S&P 500.

Institutional & Insider Ownership

87.3% of Banner shares are owned by institutional investors. 1.4% of Banner shares are owned by company insiders. Comparatively, 16.0% of Sturgis Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Banner pays an annual dividend of $2.08 per share and has a dividend yield of 3.2%. Sturgis Bancorp pays an annual dividend of $0.72 per share and has a dividend yield of 2.7%. Banner pays out 35.0% of its earnings in the form of a dividend. Sturgis Bancorp pays out 19.7% 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.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Banner and Sturgis Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banner	0	3	2	0	2.40
Sturgis Bancorp	0	0	0	0	0.00

Banner presently has a consensus price target of $71.00, suggesting a potential upside of 10.27%. Given Banner’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Banner is more favorable than Sturgis Bancorp.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banner	$877.77 million	2.49	$195.38 million	$5.94	10.84
Sturgis Bancorp	$59.13 million	0.97	$7.46 million	$3.66	7.25

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

Summary

Banner beats Sturgis Bancorp on 14 of the 16 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 Sturgis Bancorp

Sturgis Bancorp, Inc. operates as the bank holding company for Sturgis Bank & Trust Company that provides banking products and services in Michigan, the United States. The company offers checking, savings and health savings, and money market accounts; and certificates of deposit and individual retirement accounts. It also provides mortgage, automobile, savings secured, personal, home equity, equipment and machinery, government supported, and commercial real estate loans, as well as home equity lines of credit and business lines of credit; and credit cards. In addition, the company offers private banking, cashier checks, wire transfers, foreign drafts and foreign currency, overdraft protection, night depository, and notary services, as well as safe deposit boxes and residential mortgages. Further, it provides direct deposit, remote deposit capture, Visa check card, and checks reorder services; and investment and financial-advisory services, as well as commercial and consumer insurance and title insurance products. Additionally, the company offers estate and asset management services, such as estate settlements, trust administration, record keeping, investment management, and custody services; cash and treasury management; and online and mobile banking, bill pay, and mobile wallet services. It operates through 14 bank facilities and 4 full service standalone ATMs located in 12 communities in Michigan. Sturgis Bancorp, Inc. was founded in 1905 and is headquartered in Sturgis, Michigan.