Financial Analysis: Hancock (HBHC) vs. First Hawaiian (FHB)

Hancock (NASDAQ: HBHC) and First Hawaiian (NASDAQ:FHB) are both mid-cap financials companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.

Valuation and Earnings

This table compares Hancock and First Hawaiian’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hancock $982.95 million 4.51 $149.29 million $2.49 20.88
First Hawaiian $736.12 million 5.75 $230.17 million $1.64 18.49

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

Institutional and Insider Ownership

77.2% of Hancock shares are held by institutional investors. Comparatively, 35.7% of First Hawaiian shares are held by institutional investors. 1.2% of Hancock shares are held by insiders. Comparatively, 0.1% of First Hawaiian shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Hancock 19.08% 8.27% 0.90%
First Hawaiian 30.22% 9.02% 1.14%

Analyst Ratings

This is a breakdown of current ratings and price targets for Hancock and First Hawaiian, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hancock 0 4 6 1 2.73
First Hawaiian 1 3 1 0 2.00

Hancock presently has a consensus price target of $52.92, suggesting a potential upside of 1.76%. First Hawaiian has a consensus price target of $33.60, suggesting a potential upside of 10.82%. Given First Hawaiian’s higher possible upside, analysts clearly believe First Hawaiian is more favorable than Hancock.

Dividends

Hancock pays an annual dividend of $0.96 per share and has a dividend yield of 1.8%. First Hawaiian pays an annual dividend of $0.88 per share and has a dividend yield of 2.9%. Hancock pays out 38.6% of its earnings in the form of a dividend. First Hawaiian pays out 53.7% 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.

Summary

Hancock beats First Hawaiian on 9 of the 16 factors compared between the two stocks.

Hancock Company Profile

Hancock Holding Company is a financial services company that provides a network of service financial choices to the Gulf South region, through its bank subsidiary, Whitney Bank (the Bank), a Mississippi state bank. The Company operates through overall banking operations segment. The Bank operates under brands, such as Hancock Bank in Mississippi, Alabama and Florida, and Whitney Bank in Louisiana and Texas. The Bank operates across the Gulf South region, which consists of southern Mississippi; southern and central Alabama; southern Louisiana; the northern, central, and panhandle regions of Florida; Houston, Texas, and Nashville, Tennessee. The Bank offers a range of traditional and online community banking services to commercial, small business and retail customers, providing a range of transaction and savings deposit products, treasury management services and investment brokerage services, among others.

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.

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