Reviewing Peoples Bancorp of North Carolina (NASDAQ:PEBK) & Banner (NASDAQ:BANR)

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

Volatility and Risk

Banner has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500. Comparatively, Peoples Bancorp of North Carolina has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500.

Insider and Institutional Ownership

87.3% of Banner shares are held by institutional investors. Comparatively, 43.8% of Peoples Bancorp of North Carolina shares are held by institutional investors. 1.6% of Banner shares are held by company insiders. Comparatively, 16.9% of Peoples Bancorp of North Carolina shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Banner and Peoples Bancorp of North Carolina”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banner	$832.99 million	2.81	$168.90 million	$4.88	13.93
Peoples Bancorp of North Carolina	$72.53 million	2.01	$16.35 million	$2.98	8.97

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

Dividends

Banner pays an annual dividend of $1.92 per share and has a dividend yield of 2.8%. Peoples Bancorp of North Carolina pays an annual dividend of $0.76 per share and has a dividend yield of 2.8%. Banner pays out 39.3% of its earnings in the form of a dividend. Peoples Bancorp of North Carolina pays out 25.5% 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. Peoples Bancorp of North Carolina is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Banner and Peoples Bancorp of North Carolina’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banner	20.28%	10.03%	1.09%
Peoples Bancorp of North Carolina	15.08%	12.85%	0.98%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Banner and Peoples Bancorp of North Carolina, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banner	0	3	3	0	2.50
Peoples Bancorp of North Carolina	0	0	0	0	0.00

Banner currently has a consensus target price of $74.20, indicating a potential upside of 9.19%. Given Banner’s stronger consensus rating and higher possible upside, research analysts clearly believe Banner is more favorable than Peoples Bancorp of North Carolina.

Summary

Banner beats Peoples Bancorp of North Carolina on 12 of the 16 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 Peoples Bancorp of North Carolina

Peoples Bancorp of North Carolina, Inc. operates as the bank holding company for Peoples Bank that provides various banking products and services for individuals and small-to medium-sized businesses. It offers checking, savings, money market, and retirement accounts; certificates of deposits; and credit and debit cards. The company also originates commercial real estate loans, commercial loans, construction and land development loans, and residential mortgage loans; and individual taxpayer identification number mortgage loans, as well as agricultural loans. In addition, it provides investment counseling and non-deposit investment products, such as stocks, bonds, mutual funds, tax deferred annuities, and related brokerage services; and real estate appraisal and brokerage services. Further, the company operates as a clearing-house for the provision of appraisal services for community banks; and acquires, manages, and disposes real property, other collateral, and other assets obtained in the ordinary course of collecting debts. Peoples Bancorp of North Carolina, Inc. was founded in 1912 and is headquartered in Newton, North Carolina.