Head-To-Head Analysis: East West Bancorp (NASDAQ:EWBC) vs. First Hawaiian (NASDAQ:FHB)

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

Risk & Volatility

First Hawaiian has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500. Comparatively, East West Bancorp has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for First Hawaiian and East West Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Hawaiian	3	5	1	1	2.00
East West Bancorp	1	4	11	1	2.71

First Hawaiian presently has a consensus target price of $27.43, indicating a potential upside of 8.63%. East West Bancorp has a consensus target price of $124.08, indicating a potential upside of 12.46%. Given East West Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe East West Bancorp is more favorable than First Hawaiian.

Insider & Institutional Ownership

97.6% of First Hawaiian shares are held by institutional investors. Comparatively, 89.5% of East West Bancorp shares are held by institutional investors. 0.6% of First Hawaiian shares are held by insiders. Comparatively, 1.0% of East West Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Hawaiian	22.60%	9.68%	1.08%
East West Bancorp	27.16%	15.55%	1.63%

Earnings & Valuation

This table compares First Hawaiian and East West Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Hawaiian	$1.17 billion	2.68	$230.13 million	$2.05	12.32
East West Bancorp	$4.53 billion	3.35	$1.17 billion	$9.07	12.16

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

Dividends

First Hawaiian pays an annual dividend of $1.04 per share and has a dividend yield of 4.1%. East West Bancorp pays an annual dividend of $2.40 per share and has a dividend yield of 2.2%. First Hawaiian pays out 50.7% of its earnings in the form of a dividend. East West Bancorp pays out 26.5% 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. East West Bancorp has increased its dividend for 8 consecutive years.

Summary

East West Bancorp beats First Hawaiian on 14 of the 17 factors compared between the two stocks.

About First Hawaiian

First Hawaiian, Inc. operates as a bank holding company for First Hawaiian Bank that provides a range of banking products and services to consumer and commercial customers in the United States. It operates in three segments: Retail Banking, Commercial Banking, and Treasury and Other. The company offers various deposit products, including checking, savings, and time deposit accounts, and other deposit accounts. It also provides residential and commercial mortgage loans, home equity lines of credit and loans, automobile loans and leases, secured and unsecured lines of credit, installment loans, small business loans and leases, and construction lending, as well as commercial lease and auto dealer financing. In addition, the company offers wealth management, personal installment, individual investment and financial planning, insurance protection, trust and estate, private banking, investment management, retirement planning, and merchant processing services, as well as consumer and commercial credit cards. The company was formerly known as BancWest Corporation and changed its name to First Hawaiian, Inc. in April 2016. First Hawaiian, Inc. was founded in 1858 and is headquartered in Honolulu, Hawaii.

About East West Bancorp

East West Bancorp, Inc. operates as the bank holding company for East West Bank that provides a range of personal and commercial banking services to businesses and individuals in the United States. The company operates through three segments: Consumer and Business Banking, Commercial Banking, and Other. It accepts various deposit products, such as personal and business checking and savings accounts, money market, and time deposits. The company’s loan products include mortgage and home equity, commercial and residential real estate, working capital lines of credit, construction finance, trade finance, letters of credit, commercial business, affordable housing loans, asset-based lending, asset-backed finance, project finance, loan syndication, and equipment financing, as well as financing services for clients to facilitate their business transactions between the United States and Asia. It also provides various wealth management, treasury management, foreign exchange, and interest rate and commodity risk hedging services; and mobile and online banking services. The company was founded in 1973 and is headquartered in Pasadena, California.