Hanover Bancorp (NASDAQ:HNVR) and Banner (NASDAQ:BANR) Critical Analysis

Banner (NASDAQ:BANR) and Hanover Bancorp (NASDAQ:HNVR) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, institutional ownership, profitability and analyst recommendations.

Volatility & Risk

Banner has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, Hanover Bancorp has a beta of -0.09, indicating that its stock price is 109% less volatile than the S&P 500.

Dividends

Banner pays an annual dividend of $1.92 per share and has a dividend yield of 2.9%. Hanover Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 1.8%. Banner pays out 40.2% of its earnings in the form of a dividend. Hanover Bancorp pays out 24.2% 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.

Analyst Ratings

This is a summary of recent ratings and target prices for Banner and Hanover Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banner	0	3	3	0	2.50
Hanover Bancorp	0	1	1	0	2.50

Banner presently has a consensus price target of $67.00, indicating a potential upside of 0.21%. Hanover Bancorp has a consensus price target of $22.00, indicating a potential downside of 1.61%. Given Banner’s higher possible upside, research analysts clearly believe Banner is more favorable than Hanover Bancorp.

Earnings & Valuation

This table compares Banner and Hanover Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banner	$594.20 million	3.88	$183.62 million	$4.78	13.99
Hanover Bancorp	$62.58 million	2.56	$3.52 million	$1.65	13.55

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Banner	20.28%	10.22%	1.10%
Hanover Bancorp	8.39%	6.77%	0.54%

Insider and Institutional Ownership

87.3% of Banner shares are held by institutional investors. Comparatively, 15.0% of Hanover Bancorp shares are held by institutional investors. 1.6% of Banner shares are held by company insiders. Comparatively, 24.8% of Hanover Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Banner beats Hanover Bancorp on 13 of the 15 factors compared between the two stocks.

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.

About Hanover Bancorp

Hanover Bancorp, Inc., a bank holding company for Hanover Community Bank, provides personal and business lending and deposit services to businesses, municipalities, and individuals in the New York metro area. The company offers checking, credit cards, debit cards, money market, savings, government and municipal banking, and professional services, as well as time deposits, including certificate of deposit and individual retirement accounts. It also provides business loans, commercial real estate financing, small business administration, lending directory services, and residential mortgage. In addition, the company offers cash management, online and mobile banking, merchant services, and digital solutions. Its banking offices are located in Nassau, Suffolk, Queens, Kings, New York Counties, New York, Monmouth County, Freehold, and New Jersey. The company was founded in 2008 and is headquartered in Mineola, New York.