Bank of Hawaii (NYSE:BOH) & Hanmi Financial (NASDAQ:HAFC) Head to Head Contrast

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

Volatility and Risk

Bank of Hawaii has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500. Comparatively, Hanmi Financial has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bank of Hawaii	16.30%	12.67%	0.72%
Hanmi Financial	15.11%	8.77%	0.84%

Insider and Institutional Ownership

82.2% of Bank of Hawaii shares are owned by institutional investors. Comparatively, 88.7% of Hanmi Financial shares are owned by institutional investors. 2.1% of Bank of Hawaii shares are owned by insiders. Comparatively, 1.9% of Hanmi Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock 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 4.3%. Hanmi Financial pays an annual dividend of $1.08 per share and has a dividend yield of 4.4%. Bank of Hawaii pays out 73.5% of its earnings in the form of a dividend. Hanmi Financial pays out 50.2% 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. Bank of Hawaii has increased its dividend for 1 consecutive years and Hanmi Financial has increased its dividend for 1 consecutive years. Hanmi Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent ratings and price targets for Bank of Hawaii and Hanmi Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of Hawaii	1	3	1	0	2.00
Hanmi Financial	0	4	2	0	2.33

Bank of Hawaii currently has a consensus price target of $75.00, indicating a potential upside of 14.48%. Hanmi Financial has a consensus price target of $26.00, indicating a potential upside of 5.35%. Given Bank of Hawaii’s higher probable upside, equities research analysts plainly believe Bank of Hawaii is more favorable than Hanmi Financial.

Earnings and Valuation

This table compares Bank of Hawaii and Hanmi Financial”s 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	2.51	$149.99 million	$3.81	17.20
Hanmi Financial	$246.46 million	3.02	$62.20 million	$2.15	11.48

Bank of Hawaii has higher revenue and earnings than Hanmi Financial. Hanmi Financial 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

Bank of Hawaii beats Hanmi Financial on 9 of the 16 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 Hanmi Financial

Hanmi Financial Corporation operates as the holding company for Hanmi Bank that provides business banking products and services in the United States. It offers various deposit products, including noninterest-bearing checking accounts, savings accounts, negotiable order of withdrawal accounts, money market accounts, and certificates of deposit. The company also provides real estate loans, such as commercial property, construction, and residential property loans; and commercial and industrial loans, such as commercial term loans and commercial lines of credit; and international finance and trade services and products, such as letters of credit, and import and export financing. In addition, it offers small business administration loans for business purposes, which comprise owner-occupied commercial real estate, business acquisitions, start-ups, franchise financing, working capital, improvements and renovations, inventory and equipment, and debt-refinancing, as well as equipment lease financing. The company was founded in 1982 and is headquartered in Los Angeles, California.