Reviewing Banner (NASDAQ:BANR) and DNB Bank ASA (OTCMKTS:DNBBY)

DNB Bank ASA (OTCMKTS:DNBBY) and Banner (NASDAQ:BANR) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.

Dividends

DNB Bank ASA pays an annual dividend of $1.41 per share and has a dividend yield of 4.4%. Banner pays an annual dividend of $2.08 per share and has a dividend yield of 3.0%. DNB Bank ASA pays out 50.4% of its earnings in the form of a dividend. Banner pays out 34.3% 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 & Earnings

This table compares DNB Bank ASA and Banner”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DNB Bank ASA	$19.14 billion	2.60	$4.20 billion	$2.80	11.48
Banner	$877.77 million	2.73	$195.38 million	$6.06	11.63

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

Profitability

This table compares DNB Bank ASA and Banner’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DNB Bank ASA	21.34%	14.02%	1.09%
Banner	23.55%	10.72%	1.27%

Institutional & Insider Ownership

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

Analyst Recommendations

This is a summary of current ratings for DNB Bank ASA and Banner, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DNB Bank ASA	2	4	2	0	2.00
Banner	0	4	2	0	2.33

Banner has a consensus target price of $72.75, suggesting a potential upside of 3.20%. Given Banner’s stronger consensus rating and higher probable upside, analysts clearly believe Banner is more favorable than DNB Bank ASA.

Volatility and Risk

DNB Bank ASA has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500. Comparatively, Banner has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500.

Summary

Banner beats DNB Bank ASA on 11 of the 15 factors compared between the two stocks.

About DNB Bank ASA

DNB Bank ASA provides financial services for individual and business customers in Norway and internationally. The company offers savings, current, and pension accounts; fixed rate and security deposits; home and cabin mortgages, car and consumer loans, business loans, and refinancing; car, house, home contents, travel, personal, and non-life insurance product; payment services; and online and mobile banking services, as well as cards. It also provides overdraft facilities; leasing services; factoring, supply chain, and receivable purchase financing services; bank guarantee, secure trading, documentary collection, and letter of credit services; investment banking services, such as mergers and acquisition, equity and debt capital market, shares and securities, mutual funds and trading, and bonds and commodities; and private financing, as well as equity trading, foreign exchange, interest rates, and risk advisory services. In addition, the company offers treasury management, working capital, trade finance, auto lease and equipment financing, and corporate finance services, as well as act as an estate agents. DNB Bank ASA was founded in 1822 and is headquartered in Oslo, Norway.

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.