Analyzing HBT Financial (NASDAQ:HBT) and Banner (NASDAQ:BANR)

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

Earnings and Valuation

This table compares HBT Financial and Banner”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HBT Financial	$222.37 million	3.58	$71.78 million	$2.26	11.17
Banner	$832.99 million	2.84	$168.90 million	$4.88	14.07

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

Dividends

HBT Financial pays an annual dividend of $0.84 per share and has a dividend yield of 3.3%. Banner pays an annual dividend of $1.92 per share and has a dividend yield of 2.8%. HBT Financial pays out 37.2% of its earnings in the form of a dividend. Banner pays out 39.3% 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. HBT Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares HBT Financial and Banner’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HBT Financial	24.99%	14.57%	1.50%
Banner	20.28%	10.03%	1.09%

Insider & Institutional Ownership

78.6% of HBT Financial shares are held by institutional investors. Comparatively, 87.3% of Banner shares are held by institutional investors. 59.8% of HBT Financial shares are held by company insiders. Comparatively, 1.6% of Banner shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

HBT Financial has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, Banner has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for HBT Financial and Banner, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HBT Financial	1	2	2	0	2.20
Banner	0	3	3	0	2.50

HBT Financial currently has a consensus price target of $24.80, indicating a potential downside of 1.78%. Banner has a consensus price target of $74.20, indicating a potential upside of 8.07%. Given Banner’s stronger consensus rating and higher probable upside, analysts plainly believe Banner is more favorable than HBT Financial.

Summary

Banner beats HBT Financial on 9 of the 16 factors compared between the two stocks.

About HBT Financial

HBT Financial, Inc. operates as the bank holding company for Heartland Bank and Trust Company that provides business, commercial, and retail banking products and services to individuals, businesses, and municipal entities in Central and Northeastern Illinois, and Eastern Iowa. The company's deposits accounts consist of noninterest-bearing demand deposits, interest-bearing transaction accounts, money market accounts, savings accounts, certificates of deposits, health savings accounts, and individual retirement accounts. Its loan offering comprises owner and non-owner occupied commercial real estate; construction and land development and multi-family; commercial and industrial; agricultural and farmland; and one-to-four family residential loans, as well as municipal, consumer, and other loans. The company also offers wealth management services, including financial planning to consumers, trusts, and estates; trustee and custodial; investment management; corporate retirement plan consulting and administration; and retail brokerage services. In addition, it provides farmland management, and farmland sales and services; commercial checking accounts; and treasury management services, as well as originates and sells residential mortgage loans. Further, the company offers digital banking services, such as online and mobile banking, and digital payment services, as well as personal financial management tools. The company was formerly known as Heartland Bancorp, Inc. and changed its name to HBT Financial, Inc. in September 2019. HBT Financial, Inc. was founded in 1920 and is headquartered in Bloomington, Illinois.

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.