Banner (NASDAQ:BANR) and TFS Financial (NASDAQ:TFSL) Head-To-Head Contrast

Banner (NASDAQ:BANR) and TFS Financial (NASDAQ:TFSL) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Profitability

This table compares Banner and TFS Financial’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%
TFS Financial	11.42%	4.89%	0.53%

Earnings & Valuation

This table compares Banner and TFS Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banner	$877.77 million	2.50	$195.38 million	$5.94	10.88
TFS Financial	$791.96 million	5.57	$90.96 million	$0.33	47.67

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

Dividends

Banner pays an annual dividend of $2.08 per share and has a dividend yield of 3.2%. TFS Financial pays an annual dividend of $1.13 per share and has a dividend yield of 7.2%. Banner pays out 35.0% of its earnings in the form of a dividend. TFS Financial pays out 342.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of recent recommendations and price targets for Banner and TFS Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banner	0	3	2	0	2.40
TFS Financial	0	3	1	0	2.25

Banner currently has a consensus price target of $71.00, indicating a potential upside of 9.82%. TFS Financial has a consensus price target of $15.50, indicating a potential downside of 1.46%. Given Banner’s stronger consensus rating and higher possible upside, equities analysts clearly believe Banner is more favorable than TFS Financial.

Insider & Institutional Ownership

87.3% of Banner shares are owned by institutional investors. Comparatively, 9.8% of TFS Financial shares are owned by institutional investors. 1.4% of Banner shares are owned by company insiders. Comparatively, 0.7% of TFS Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk & Volatility

Banner has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500. Comparatively, TFS Financial has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500.

Summary

Banner beats TFS Financial on 13 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 TFS Financial

TFS Financial Corporation, through its subsidiaries, provides retail consumer banking services in the United States. Its deposit products include savings, money market, checking, individual retirement, and other qualified plan accounts, as well as certificates of deposit. The company also provides residential real estate mortgage loans, residential construction loans, and home equity loans and lines of credit, as well as purchase mortgages and first mortgage refinance loans. In addition, it offers escrow and settlement services. The company provides its products and services through its main office in Cleveland, Ohio; and multiple full-service branches and loan production offices located throughout the states of Ohio and Florida. TFS Financial Corporation was founded in 1938 and is headquartered in Cleveland, Ohio. TFS Financial Corporation is a subsidiary of Third Federal Savings and Loan Association of Cleveland, MHC.