Financial Survey: Five Star Bancorp (NASDAQ:FSBC) & Banner (NASDAQ:BANR)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Banner	22.81%	10.44%	1.25%
Five Star Bancorp	26.58%	15.55%	1.50%

Dividends

Banner pays an annual dividend of $2.08 per share and has a dividend yield of 3.0%. Five Star Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 2.3%. Banner pays out 35.4% of its earnings in the form of a dividend. Five Star Bancorp pays out 28.3% 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.

Valuation and Earnings

This table compares Banner and Five Star 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	2.87	$195.38 million	$5.88	11.76
Five Star Bancorp	$255.47 million	4.25	$61.61 million	$3.53	12.54

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

Analyst Recommendations

This is a breakdown of current recommendations for Banner and Five Star Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banner	0	4	2	0	2.33
Five Star Bancorp	0	3	2	0	2.40

Banner presently has a consensus price target of $75.75, suggesting a potential upside of 9.52%. Five Star Bancorp has a consensus price target of $49.00, suggesting a potential upside of 10.72%. Given Five Star Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Five Star Bancorp is more favorable than Banner.

Risk & Volatility

Banner has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, Five Star Bancorp has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500.

Insider & Institutional Ownership

87.3% of Banner shares are held by institutional investors. Comparatively, 46.9% of Five Star Bancorp shares are held by institutional investors. 1.4% of Banner shares are held by company insiders. Comparatively, 21.8% of Five Star Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Five Star Bancorp beats Banner on 9 of the 15 factors compared between the two stocks.

About Banner

Banner Corporation is a bank holding company and the parent of Banner Bank, a community bank serving individuals, businesses and organizations in the western United States. The company traces its roots to the First National Bank of Walla Walla, established in Washington in 1890. Through Banner Bank, the company offers deposit accounts, business and consumer lending, residential mortgage services, and commercial banking solutions. Its services also include treasury management and wealth management.

About Five Star Bancorp

Five Star Bancorp is a bank holding company headquartered in Rancho Cordova, California. It operates through its subsidiary, Five Star Bank, which provides commercial and consumer banking services to businesses, organizations and individuals. The bank offers deposit accounts, business and personal lending, cash management and other banking services. Its lending activities include financing for commercial real estate and business needs, alongside services for professionals and nonprofit organizations.