1st Source (NASDAQ:SRCE – Get Free Report) and Banner (NASDAQ:BANR – Get Free Report) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, profitability, earnings, dividends, valuation, analyst recommendations and institutional ownership.
Profitability
This table compares 1st Source and Banner’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| 1st Source | 23.23% | 12.02% | 1.47% |
| Banner | 20.93% | 10.89% | 1.14% |
Analyst Ratings
This is a breakdown of recent recommendations and price targets for 1st Source and Banner, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| 1st Source | 0 | 2 | 0 | 0 | 2.00 |
| Banner | 0 | 3 | 3 | 0 | 2.50 |
Dividends
1st Source pays an annual dividend of $1.44 per share and has a dividend yield of 2.4%. Banner pays an annual dividend of $1.92 per share and has a dividend yield of 3.2%. 1st Source pays out 29.0% of its earnings in the form of a dividend. Banner pays out 39.9% 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. 1st Source has increased its dividend for 37 consecutive years.
Institutional and Insider Ownership
74.4% of 1st Source shares are held by institutional investors. Comparatively, 87.3% of Banner shares are held by institutional investors. 19.3% of 1st Source shares are held by insiders. Comparatively, 1.6% of Banner shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Volatility & Risk
1st Source has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500. Comparatively, Banner has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500.
Earnings & Valuation
This table compares 1st Source and Banner”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| 1st Source | $376.44 million | 3.89 | $124.93 million | $4.97 | 12.03 |
| Banner | $595.20 million | 3.52 | $183.62 million | $4.81 | 12.63 |
Banner has higher revenue and earnings than 1st Source. 1st Source is trading at a lower price-to-earnings ratio than Banner, indicating that it is currently the more affordable of the two stocks.
Summary
1st Source beats Banner on 9 of the 17 factors compared between the two stocks.
About 1st Source
1st Source Corporation operates as the bank holding company for 1st Source Bank that provides commercial and consumer banking services, trust and wealth advisory services, and insurance products to individual and business clients. Its consumer banking services include checking and savings accounts; certificates of deposit; individual retirement accounts; online and mobile banking products; consumer loans, real estate mortgage loans, and home equity lines of credit; and financial planning, financial literacy, and other consultative services, as well as debit and credit cards. The company also offers commercial, small business, agricultural, and real estate loans for general corporate purposes, including financing for industrial and commercial properties, equipment, inventories, accounts receivables, and renewable energy and acquisition financing; and commercial leasing, treasury management, and retirement planning services. In addition, it provides trust, investment, agency, and custodial services comprising administration of estates and personal trusts, as well as management of investment accounts for individuals, employee benefit plans, and charitable foundations. Further, the company offers equipment loan and lease products for construction equipment, new and pre-owned aircraft, auto and light trucks, and medium and heavy duty trucks; and finances construction equipment, aircrafts, medium and heavy duty trucks, step vans, vocational work trucks, motor coaches, shuttle buses, funeral cars, automobiles, and other equipment. Additionally, it provides corporate and personal property, casualty, and individual and group health and life insurance products and services. 1st Source Corporation was founded in 1863 and is headquartered in South Bend, Indiana.
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.
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