Banner (NASDAQ: PPBI) and Pacific Premier Bancorp (NASDAQ:PPBI) are both mid-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, earnings, valuation, institutional ownership, profitability, risk and analyst recommendations.

Profitability

This table compares Banner and Pacific Premier Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Banner 14.02% 8.59% 1.07%
Pacific Premier Bancorp 24.60% 8.61% 1.33%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Banner and Pacific Premier Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Banner 0 4 1 0 2.20
Pacific Premier Bancorp 0 1 1 0 2.50

Banner currently has a consensus price target of $64.25, indicating a potential upside of 0.16%. Pacific Premier Bancorp has a consensus price target of $49.00, indicating a potential upside of 26.61%. Given Pacific Premier Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Pacific Premier Bancorp is more favorable than Banner.

Valuation & Earnings

This table compares Banner and Pacific Premier Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Banner $505.82 million 4.10 $60.77 million $2.99 21.45
Pacific Premier Bancorp $301.12 million 8.02 $60.10 million $1.77 21.86

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

Dividends

Banner pays an annual dividend of $1.40 per share and has a dividend yield of 2.2%. Pacific Premier Bancorp does not pay a dividend. Banner pays out 46.8% of its earnings in the form of a dividend. Banner has increased its dividend for 5 consecutive years.

Institutional and Insider Ownership

92.0% of Banner shares are held by institutional investors. Comparatively, 74.6% of Pacific Premier Bancorp shares are held by institutional investors. 1.7% of Banner shares are held by insiders. Comparatively, 4.6% of Pacific Premier Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Banner has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500. Comparatively, Pacific Premier Bancorp has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500.

Summary

Pacific Premier Bancorp beats Banner on 9 of the 16 factors compared between the two stocks.

Banner Company Profile

Banner Corporation operates as the bank holding company for Banner Bank and Islanders Bank, which provides commercial banking and financial products and services to individuals, businesses, and public sector entities primarily in the United States. It offers deposit products, 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; construction, land, and land development loans; residential mortgage loans; commercial business loans; agricultural loans; and consumer loans, such as home equity lines of credit, automobile, and boat and recreational vehicle loans, as well as loans secured by deposit accounts. In addition, it engages in the mortgage banking operations through the origination and sale of one- to four-family and multi-family residential loans. As of December 31, 2017, the company operated 178 branch offices, including 175 Banner Bank branches and 3 Islanders Bank branches located in Washington, Oregon, California, and Idaho. It also operates 13 Banner Bank loan production offices located in Washington, Oregon, California, Idaho, and Utah. Banner Corporation was founded in 1890 and is based in Walla Walla, Washington.

Pacific Premier Bancorp Company Profile

Pacific Premier Bancorp, Inc. operates as the bank holding company for Pacific Premier Bank that provides banking services to businesses, professionals, real estate investors, and non-profit organizations. Its deposit products include checking, money market, and savings accounts. The company's loan portfolio comprises commercial business loans, lines of credit, small business administration loans, commercial real estate loans, agribusiness loans, home equity lines of credit, construction loans, farmland, and consumer loans, as well as multi-family residential, one-to-four family real estate, commercial and industrial, and franchise lending; warehouse repurchase facilities; and credit facilities to Home Owners' Associations (HOA) and HOA management companies. It also offers cash management, electronic banking, and online bill payment services. The company conducts business through 33 full-service depository branches in the counties of Orange, Los Angeles, Riverside, San Bernardino, San Diego, San Luis Obispo, and Santa Barbara, California, as well as Clark County, Nevada. Pacific Premier Bancorp, Inc. was founded in 1983 and is headquartered in Irvine, California.

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