TFS Financial (NASDAQ:TFSL – Get Free Report) and Banner (NASDAQ:BANR – Get Free Report) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, dividends, valuation, profitability and analyst recommendations.
Insider and Institutional Ownership
9.8% of TFS Financial shares are held by institutional investors. Comparatively, 87.3% of Banner shares are held by institutional investors. 0.7% of TFS Financial shares are held by insiders. Comparatively, 1.4% of Banner shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for TFS Financial and Banner, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| TFS Financial | 0 | 3 | 1 | 0 | 2.25 |
| Banner | 0 | 3 | 2 | 0 | 2.40 |
Dividends
TFS Financial pays an annual dividend of $1.13 per share and has a dividend yield of 7.4%. Banner pays an annual dividend of $2.08 per share and has a dividend yield of 3.3%. TFS Financial pays out 342.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Banner pays out 35.0% of its earnings in the form of a dividend.
Volatility & Risk
TFS Financial has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500. Comparatively, Banner has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500.
Valuation & Earnings
This table compares TFS Financial and Banner”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| TFS Financial | $336.50 million | 12.77 | $90.96 million | $0.33 | 46.42 |
| Banner | $663.41 million | 3.26 | $195.38 million | $5.94 | 10.73 |
Banner has higher revenue and earnings than TFS Financial. Banner is trading at a lower price-to-earnings ratio than TFS Financial, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares TFS Financial and Banner’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| TFS Financial | 11.42% | 4.89% | 0.53% |
| Banner | 23.24% | 10.77% | 1.26% |
Summary
Banner beats TFS Financial on 13 of the 16 factors compared between the two stocks.
About TFS Financial
TFS Financial Corporation, through its subsidiaries, provides retail consumer banking services in the United States. Its deposit products include savings, money market, checking, individual retirement, and other qualified plan accounts, as well as certificates of deposit. The company also provides residential real estate mortgage loans, residential construction loans, and home equity loans and lines of credit, as well as purchase mortgages and first mortgage refinance loans. In addition, it offers escrow and settlement services. The company provides its products and services through its main office in Cleveland, Ohio; and multiple full-service branches and loan production offices located throughout the states of Ohio and Florida. TFS Financial Corporation was founded in 1938 and is headquartered in Cleveland, Ohio. TFS Financial Corporation is a subsidiary of Third Federal Savings and Loan Association of Cleveland, MHC.
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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