Contrasting Northrim BanCorp (NASDAQ:NRIM) and Bank of Hawaii (NYSE:BOH)

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

Institutional and Insider Ownership

82.2% of Bank of Hawaii shares are held by institutional investors. Comparatively, 66.0% of Northrim BanCorp shares are held by institutional investors. 2.0% of Bank of Hawaii shares are held by company insiders. Comparatively, 2.4% of Northrim 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.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Bank of Hawaii and Northrim BanCorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of Hawaii	0	5	3	0	2.38
Northrim BanCorp	0	2	2	0	2.50

Bank of Hawaii currently has a consensus price target of $85.80, indicating a potential upside of 1.99%. Northrim BanCorp has a consensus price target of $31.50, indicating a potential upside of 16.28%. Given Northrim BanCorp’s stronger consensus rating and higher possible upside, analysts clearly believe Northrim BanCorp is more favorable than Bank of Hawaii.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of Hawaii	$1.07 billion	3.12	$205.90 million	$4.95	16.99
Northrim BanCorp	$255.58 million	2.36	$64.61 million	$3.04	8.91

Bank of Hawaii has higher revenue and earnings than Northrim BanCorp. Northrim BanCorp 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bank of Hawaii	20.46%	14.97%	0.92%
Northrim BanCorp	26.03%	17.62%	1.73%

Risk & Volatility

Bank of Hawaii has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, Northrim BanCorp has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500.

Dividends

Bank of Hawaii pays an annual dividend of $2.80 per share and has a dividend yield of 3.3%. Northrim BanCorp pays an annual dividend of $0.64 per share and has a dividend yield of 2.4%. Bank of Hawaii pays out 56.6% of its earnings in the form of a dividend. Northrim BanCorp pays out 21.1% 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 raised its dividend for 1 consecutive years and Northrim BanCorp has raised its dividend for 16 consecutive years.

Summary

Northrim BanCorp beats Bank of Hawaii on 9 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 Northrim BanCorp

Northrim BanCorp, Inc. operates as the bank holding company for Northrim Bank that provides commercial banking products and services to businesses and professional individuals. It operates through two segments, Community Banking and Home Mortgage Lending. The company offers noninterest-bearing checking accounts and interest-bearing time deposits, checking and savings accounts, individual retirement and money market deposit accounts, certificates of deposit, and business sweep accounts. It also provides short and medium-term commercial loans, commercial credit lines, construction and real estate loans, and consumer loans, as well as short-term working capital. In addition, the company offers other services comprising consumer and business online banking, mobile app, and mobile deposits; and debit and credit cards. Further, it provides mobile web and app banking, consumer online account opening, personal finance, online documents, consumer debit cards, business debit cards, my rewards for consumer debit cards, retail lockbox, card control, corporate purchase cards, integrated payables, home equity advantage access cards, telebanking, and automated teller services. Additionally, the company offers personalized checks at account opening, overdraft protection from a savings account, commercial drive-up banking, automatic transfer and payment, People Pay, external transfer, Bill Pay, wire transfer, direct payroll deposit, electronic tax payment, Automated Clearing House origination and receipt, remote deposit capture, account reconciliation and positive pay, merchant, cash management, annuity, and long-term investment portfolio products and services. It also provides investment advisory, trust, wealth management, factoring, and mortgage services. The company was founded in 1990 and is headquartered in Anchorage, Alaska.