First Business Financial Services (FBIZ) versus Bank of Hawaii (BOH) Head-To-Head Comparison

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

Analyst Ratings

This is a summary of current ratings and recommmendations for First Business Financial Services and Bank of Hawaii, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Business Financial Services 0 1 0 0 2.00
Bank of Hawaii 1 4 1 0 2.00

First Business Financial Services currently has a consensus price target of $25.00, indicating a potential upside of 4.17%. Bank of Hawaii has a consensus price target of $90.90, indicating a potential upside of 13.44%. Given Bank of Hawaii’s higher possible upside, analysts clearly believe Bank of Hawaii is more favorable than First Business Financial Services.

Profitability

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

Net Margins Return on Equity Return on Assets
First Business Financial Services 12.87% 7.17% 0.66%
Bank of Hawaii 26.80% 15.48% 1.11%

Volatility & Risk

First Business Financial Services has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500. Comparatively, Bank of Hawaii has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500.

Dividends

First Business Financial Services pays an annual dividend of $0.56 per share and has a dividend yield of 2.3%. Bank of Hawaii pays an annual dividend of $2.08 per share and has a dividend yield of 2.6%. First Business Financial Services pays out 40.9% of its earnings in the form of a dividend. Bank of Hawaii pays out 47.9% 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 2 consecutive years. Bank of Hawaii is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

58.9% of First Business Financial Services shares are held by institutional investors. Comparatively, 75.7% of Bank of Hawaii shares are held by institutional investors. 8.3% of First Business Financial Services shares are held by insiders. Comparatively, 2.2% of Bank of Hawaii shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares First Business Financial Services and Bank of Hawaii’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Business Financial Services $92.48 million 2.27 $11.90 million $1.37 17.52
Bank of Hawaii $689.21 million 4.93 $184.67 million $4.34 18.46

Bank of Hawaii has higher revenue and earnings than First Business Financial Services. First Business Financial Services 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 First Business Financial Services on 13 of the 16 factors compared between the two stocks.

First Business Financial Services Company Profile

First Business Financial Services, Inc. (FBFS) is a bank holding company. The Company engages in the commercial banking business through its bank subsidiaries, which include First Business Bank (FBB), First Business Bank-Milwaukee (FBB-Milwaukee) and Alterra Bank (Alterra) (FBB and FBB-Milwaukee and, together with FBB, the Banks). The operations of FBFS are conducted through the Banks and certain subsidiaries of FBB. The Banks operate as business banks focusing on delivering a line of commercial banking products, including commercial loans and commercial real estate loans, and services to meet the needs of small- and medium-sized businesses, business owners, executives, professionals and high net worth individuals. Its business lines include commercial lending, asset-based financing, equipment financing, small business administration (SBA) lending, treasury management services, and trust and investment services. Its investments include short-term investments and securities.

Bank of Hawaii Company Profile

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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