Financial Analysis: Westamerica Bancorporation (NASDAQ:WABC) and Bank of Hawaii (NYSE:BOH)

Bank of Hawaii (NYSE:BOH) and Westamerica Bancorporation (NASDAQ:WABC) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Institutional & Insider Ownership

82.2% of Bank of Hawaii shares are held by institutional investors. Comparatively, 81.9% of Westamerica Bancorporation shares are held by institutional investors. 2.1% of Bank of Hawaii shares are held by insiders. Comparatively, 5.3% of Westamerica Bancorporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Bank of Hawaii pays an annual dividend of $2.80 per share and has a dividend yield of 4.1%. Westamerica Bancorporation pays an annual dividend of $1.84 per share and has a dividend yield of 3.8%. Bank of Hawaii pays out 78.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Westamerica Bancorporation pays out 36.9% of its earnings in the form of a dividend. Bank of Hawaii has increased its dividend for 1 consecutive years and Westamerica Bancorporation has increased its dividend for 34 consecutive years.

Volatility & Risk

Bank of Hawaii has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, Westamerica Bancorporation has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500.

Profitability

This table compares Bank of Hawaii and Westamerica Bancorporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of Hawaii	15.12%	12.16%	0.68%
Westamerica Bancorporation	44.10%	14.95%	2.16%

Analyst Ratings

This is a breakdown of current ratings and target prices for Bank of Hawaii and Westamerica Bancorporation, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of Hawaii	2	3	1	0	1.83
Westamerica Bancorporation	0	3	0	0	2.00

Bank of Hawaii presently has a consensus price target of $73.17, suggesting a potential upside of 8.10%. Westamerica Bancorporation has a consensus price target of $52.50, suggesting a potential upside of 8.91%. Given Westamerica Bancorporation’s stronger consensus rating and higher possible upside, analysts plainly believe Westamerica Bancorporation is more favorable than Bank of Hawaii.

Earnings and Valuation

This table compares Bank of Hawaii and Westamerica Bancorporation”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of Hawaii	$1.04 billion	2.60	$149.99 million	$3.56	19.01
Westamerica Bancorporation	$284.32 million	4.44	$138.64 million	$4.99	9.66

Bank of Hawaii has higher revenue and earnings than Westamerica Bancorporation. Westamerica Bancorporation is trading at a lower price-to-earnings ratio than Bank of Hawaii, indicating that it is currently the more affordable of the two stocks.

Summary

Westamerica Bancorporation beats Bank of Hawaii on 10 of the 17 factors compared between the two stocks.

About Bank of Hawaii

Bank of Hawaii Corporation operates as the bank holding company for Bank of Hawaii that provides various financial products and services in Hawaii, Guam, and other Pacific Islands. It operates in three segments: Consumer Banking, Commercial Banking, and Treasury and Other. The Consumer Banking segment offers checking, savings, and time deposit accounts; residential mortgage loans, home equity lines of credit, automobile loans and leases, overdraft lines of credit, installment loans, small business loans and leases, and credit cards; private and international client banking, investment, credit, and trust services to individuals and families, as well as high-net-worth individuals; investment management; institutional investment advisory services to corporations, government entities, and foundations; and brokerage offerings, including equities, mutual funds, life insurance, and annuity products. The Commercial Banking segment provides corporate banking, commercial real estate loans, commercial lease financing, auto dealer financing, and deposit products. This segment also offers commercial lending and deposit products to middle-market and large companies, and government entities; commercial real estate mortgages to investors, developers, and builders; and international banking and merchant services. The Treasury and Other segment provides corporate asset and liability management services, including interest rate risk management and foreign exchange services. Bank of Hawaii Corporation was founded in 1897 and is headquartered in Honolulu, Hawaii.

About Westamerica Bancorporation

Westamerica Bancorporation operates as a bank holding company for the Westamerica Bank that provides various banking products and services to individual and commercial customers. The company accepts various deposit products, including retail savings and checking accounts, as well as certificates of deposit. Its loan portfolio includes commercial, commercial and residential real estate, real estate construction, and consumer installment loans, as well as indirect automobile loans. The company was formerly known as Independent Bankshares Corporation and changed its name to Westamerica Bancorporation in 1983. The company was founded in 1884 and is headquartered in San Rafael, California.