Financial Review: Home Federal Bancorp, Inc. of Louisiana (NASDAQ:HFBL) vs. Banner (NASDAQ:BANR)

Home Federal Bancorp, Inc. of Louisiana (NASDAQ:HFBL) and Banner (NASDAQ:BANR) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.

Institutional and Insider Ownership

21.1% of Home Federal Bancorp, Inc. of Louisiana shares are owned by institutional investors. Comparatively, 87.3% of Banner shares are owned by institutional investors. 25.6% of Home Federal Bancorp, Inc. of Louisiana shares are owned by company insiders. Comparatively, 1.6% of Banner shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Home Federal Bancorp, Inc. of Louisiana has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500. Comparatively, Banner has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500.

Dividends

Home Federal Bancorp, Inc. of Louisiana pays an annual dividend of $0.54 per share and has a dividend yield of 3.8%. Banner pays an annual dividend of $1.92 per share and has a dividend yield of 3.0%. Home Federal Bancorp, Inc. of Louisiana pays out 42.9% of its earnings in the form of a dividend. Banner pays out 36.6% 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. Home Federal Bancorp, Inc. of Louisiana has increased its dividend for 11 consecutive years. Home Federal Bancorp, Inc. of Louisiana is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Home Federal Bancorp, Inc. of Louisiana and Banner, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Home Federal Bancorp, Inc. of Louisiana	0	1	0	0	2.00
Banner	0	2	4	0	2.67

Banner has a consensus price target of $70.17, suggesting a potential upside of 9.65%. Given Banner’s stronger consensus rating and higher probable upside, analysts clearly believe Banner is more favorable than Home Federal Bancorp, Inc. of Louisiana.

Profitability

This table compares Home Federal Bancorp, Inc. of Louisiana and Banner’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Home Federal Bancorp, Inc. of Louisiana	11.98%	7.13%	0.63%
Banner	21.15%	10.06%	1.13%

Earnings & Valuation

This table compares Home Federal Bancorp, Inc. of Louisiana and Banner”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Home Federal Bancorp, Inc. of Louisiana	$32.47 million	1.33	$3.89 million	$1.26	11.19
Banner	$832.99 million	2.66	$168.90 million	$5.25	12.19

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

Summary

Banner beats Home Federal Bancorp, Inc. of Louisiana on 14 of the 17 factors compared between the two stocks.

About Home Federal Bancorp, Inc. of Louisiana

Home Federal Bancorp, Inc. of Louisiana operates as the holding company for Home Federal Bank that provides various financial services to individuals, corporate entities, and other organizations. The company accepts various deposits, such as passbook savings, certificates of deposit, and demand deposit accounts. Its loan products include one-to-four family residential real estate loans; commercial real estate secured loans; multi-family residential loans; commercial business loans; land loans; construction loans; home equity and second mortgage loans; lines of credit; and consumer non-real estate loans, including loans secured by deposit accounts, automobile loans, overdrafts, and other unsecured loans. The company operates through branches in Shreveport, Bossier City, Minden, and Benton, Louisiana. The company was founded in 1924 and is based in Shreveport, Louisiana.

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.