Lake Shore Bancorp (NASDAQ:LSBK – Get Free Report) and Banner (NASDAQ:BANR – Get Free Report) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, dividends, earnings and profitability.
Dividends
Lake Shore Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 2.3%. Banner pays an annual dividend of $2.08 per share and has a dividend yield of 3.2%. Lake Shore Bancorp pays out 30.5% of its earnings in the form of a dividend. Banner pays out 35.0% 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 breakdown of recent ratings for Lake Shore Bancorp and Banner, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lake Shore Bancorp | 0 | 1 | 0 | 0 | 2.00 |
| Banner | 0 | 3 | 2 | 0 | 2.40 |
Earnings & Valuation
This table compares Lake Shore Bancorp and Banner”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Lake Shore Bancorp | $39.56 million | 3.17 | $7.27 million | $1.18 | 13.51 |
| Banner | $877.77 million | 2.50 | $195.38 million | $5.94 | 10.86 |
Banner has higher revenue and earnings than Lake Shore Bancorp. Banner is trading at a lower price-to-earnings ratio than Lake Shore Bancorp, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
8.8% of Lake Shore Bancorp shares are held by institutional investors. Comparatively, 87.3% of Banner shares are held by institutional investors. 8.4% of Lake Shore Bancorp 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.
Volatility & Risk
Lake Shore Bancorp has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500. Comparatively, Banner has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500.
Profitability
This table compares Lake Shore Bancorp and Banner’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lake Shore Bancorp | 20.23% | 6.53% | 1.11% |
| Banner | 23.24% | 10.77% | 1.26% |
Summary
Banner beats Lake Shore Bancorp on 12 of the 16 factors compared between the two stocks.
About Lake Shore Bancorp
Lake Shore Bancorp, Inc. operates as a savings and loan holding company for Lake Shore Servings Bank. It offers personal services such as checking, savings, lending, banking, debit card, e-services, and online banking; and business services including deposit products, commercial loans, and business e-statements. The company was founded in 2006 and is headquartered in Dunkirk, NY.
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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