Bank of Hawaii (BOH) and CapitalSource (CSE) Critical Contrast

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

Analyst Ratings

This is a summary of current ratings for CapitalSource and Bank of Hawaii, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CapitalSource 0 0 0 0 N/A
Bank of Hawaii 1 4 1 0 2.00

Bank of Hawaii has a consensus price target of $88.70, indicating a potential upside of 1.33%.

Insider & Institutional Ownership

75.7% of Bank of Hawaii shares are owned by institutional investors. 2.2% of Bank of Hawaii shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares CapitalSource and Bank of Hawaii’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CapitalSource N/A N/A N/A N/A N/A
Bank of Hawaii $655.24 million 5.68 $181.46 million $4.35 20.12

Bank of Hawaii has higher revenue and earnings than CapitalSource.

Profitability

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

Net Margins Return on Equity Return on Assets
CapitalSource N/A N/A N/A
Bank of Hawaii 27.27% 15.45% 1.10%

Dividends

Bank of Hawaii pays an annual dividend of $2.08 per share and has a dividend yield of 2.4%. CapitalSource does not pay a dividend. Bank of Hawaii pays out 47.8% of its earnings in the form of a dividend.

Summary

Bank of Hawaii beats CapitalSource on 8 of the 9 factors compared between the two stocks.

About CapitalSource

CapitalSource Inc. (CapitalSource) is a commercial lender, which provides financial products to small and middle market businesses nationwide and provides depository products and services to consumers in southern and central California, through its wholly owned subsidiary, CapitalSource Bank. As of December 31, 2012, it had 21 retail bank branches located in southern and central California. During the year ended December 31, 2012, it operated as two reportable segments: CapitalSource Bank and Other Commercial Finance. Its CapitalSource Bank segment comprises its commercial lending and banking business activities, and its Other Commercial Finance segment comprises its loan portfolio and other business activities in the Parent Company. In April 2014, PacWest Bancorp merged with CapitalSource Inc.

About Bank of Hawaii

Bank of Hawaii Corporation is a bank holding company that operates through its subsidiary, Bank of Hawaii (the Bank). The Bank provides a range of financial products and services primarily to customers in Hawaii, Guam and other Pacific Islands. It operates in four segments: Retail Banking, Commercial Banking, Investment Services, and Treasury and Other. The Retail Banking segment offers a range of financial products and services to consumers and small businesses. The Commercial Banking segment offers products, including corporate banking, commercial real estate loans, commercial lease financing, auto dealer financing and deposit products. The Investment Services segment offers private banking and international client banking, trust services, investment management and institutional investment advisory services. The Treasury and Other segment consists of corporate asset and liability management activities, including interest rate risk management and a foreign currency exchange business.

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