Head-To-Head Analysis: Five Star Bancorp (NASDAQ:FSBC) & Banner (NASDAQ:BANR)

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

Dividends

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Five Star Bancorp	26.58%	16.89%	1.53%
Banner	22.81%	10.44%	1.25%

Insider and Institutional Ownership

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

Valuation & Earnings

This table compares Five Star Bancorp and Banner”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Five Star Bancorp	$255.47 million	4.25	$61.61 million	$3.53	12.55
Banner	$877.77 million	2.92	$195.38 million	$5.88	11.97

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.

Risk & Volatility

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

Analyst Ratings

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

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

Five Star Bancorp currently has a consensus target price of $49.00, suggesting a potential upside of 10.63%. Banner has a consensus target price of $75.75, suggesting a potential upside of 7.66%. Given Five Star Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Five Star Bancorp is more favorable than Banner.

Summary

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

About Five Star Bancorp

Five Star Bancorp operates as the bank holding company for Five Star Bank that provides a range of banking products and services to small and medium-sized businesses, professionals, and individuals in Northern California. It accepts various deposits, such as money market accounts, noninterest-bearing and interest checking accounts, savings accounts, term certificate accounts, and time deposits. The company also offers loan products, including commercial and residential real estate loans; commercial loans; commercial land loans; farmland loans; commercial and residential construction loans; and consumer and other loans, as well as operating lines of credit. In addition, it provides debit cards; and remote deposit capture, online and mobile banking, and direct deposit services. Five Star Bancorp was founded in 1999 and is headquartered in Rancho Cordova, California.

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.