First Hawaiian (NASDAQ: FHB) and BNC Bancorp (NASDAQ:BNCN) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, valuation, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings for First Hawaiian and BNC Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Hawaiian 0 3 1 0 2.25
BNC Bancorp 0 2 0 0 2.00

First Hawaiian currently has a consensus price target of $33.00, indicating a potential upside of 11.41%. BNC Bancorp has a consensus price target of $37.75, indicating a potential upside of 7.40%. Given First Hawaiian’s stronger consensus rating and higher possible upside, analysts plainly believe First Hawaiian is more favorable than BNC Bancorp.

Dividends

First Hawaiian pays an annual dividend of $0.88 per share and has a dividend yield of 3.0%. BNC Bancorp pays an annual dividend of $0.05 per share and has a dividend yield of 0.1%. First Hawaiian pays out 53.3% of its earnings in the form of a dividend. BNC Bancorp pays out 3.8% 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.

Valuation & Earnings

This table compares First Hawaiian and BNC Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Hawaiian $736.12 million 5.62 $230.17 million $1.65 17.95
BNC Bancorp N/A N/A N/A $1.32 26.63

First Hawaiian has higher revenue and earnings than BNC Bancorp. First Hawaiian is trading at a lower price-to-earnings ratio than BNC Bancorp, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

35.7% of First Hawaiian shares are owned by institutional investors. Comparatively, 62.6% of BNC Bancorp shares are owned by institutional investors. 0.1% of First Hawaiian shares are owned by insiders. Comparatively, 6.2% of BNC Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares First Hawaiian and BNC Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Hawaiian 30.22% 9.02% 1.14%
BNC Bancorp 19.39% 6.37% 0.77%

Summary

First Hawaiian beats BNC Bancorp on 9 of the 13 factors compared between the two stocks.

First Hawaiian Company Profile

First Hawaiian, Inc., formerly BancWest Corporation, is a bank holding company. The Company owns First Hawaiian Bank. It operates through three segments: Retail Banking, which includes the financial products and services it provides to consumers, small businesses and certain commercial customers; Commercial Banking, which includes its corporate banking, residential and commercial real estate loans, commercial lease financing, auto dealer financing, deposit products and credit cards, and Treasury and Other, which includes its treasury business, which consists of corporate asset and liability management activities, including interest rate risk management. It provides a range of deposit accounts and lending services to commercial and consumer customers, as well as credit card products, wealth management services and merchant processing services. It provides a range of banking services to consumer and commercial customers, including deposit products, lending services and wealth management.

BNC Bancorp Company Profile

BNC Bancorp is a one-bank holding company for Bank of North Carolina (the Bank). The Bank is a full service commercial bank, which provides a range of banking services tailored to the particular banking needs of the communities it serves. It is engaged in the business of attracting deposits from the general public and using those deposits, together with other funding from its lines of credit, to make commercial and consumer loans. It provides banking services to individuals and small to medium-sized local businesses. It also offers a range of banking services, including traditional products, such as checking and savings accounts. Its other banking services include Mortgage Lending, Small Business Administration Lending, Wealth Management Services and Insurance Services. It offers an array of residential mortgage products, including long-term fixed rate and variable rate loans. Its Wealth Management Services include financial planning, wealth management, and trust and estate planning.

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