Independent Bank Co.(MI) (NASDAQ:IBCP) and First Hawaiian (NASDAQ:FHB) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, risk, institutional ownership, earnings and analyst recommendations.
Valuation and Earnings
This table compares Independent Bank Co.(MI) and First Hawaiian’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Independent Bank Co.(MI)||$175.59 million||3.06||$39.84 million||$1.68||13.28|
|First Hawaiian||$825.04 million||4.43||$264.39 million||$2.09||12.96|
Insider and Institutional Ownership
79.1% of Independent Bank Co.(MI) shares are owned by institutional investors. Comparatively, 81.5% of First Hawaiian shares are owned by institutional investors. 2.2% of Independent Bank Co.(MI) shares are owned by company insiders. Comparatively, 0.2% of First Hawaiian shares are owned by company 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.
This is a breakdown of current ratings and target prices for Independent Bank Co.(MI) and First Hawaiian, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Independent Bank Co.(MI)||0||2||1||0||2.33|
Independent Bank Co.(MI) currently has a consensus price target of $27.00, suggesting a potential upside of 21.02%. First Hawaiian has a consensus price target of $29.50, suggesting a potential upside of 8.94%. Given Independent Bank Co.(MI)’s higher probable upside, research analysts clearly believe Independent Bank Co.(MI) is more favorable than First Hawaiian.
Independent Bank Co.(MI) pays an annual dividend of $0.72 per share and has a dividend yield of 3.2%. First Hawaiian pays an annual dividend of $1.04 per share and has a dividend yield of 3.8%. Independent Bank Co.(MI) pays out 42.9% of its earnings in the form of a dividend. First Hawaiian pays out 49.8% 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. Independent Bank Co.(MI) has increased its dividend for 3 consecutive years.
Risk and Volatility
Independent Bank Co.(MI) has a beta of 0.43, indicating that its share price is 57% less volatile than the S&P 500. Comparatively, First Hawaiian has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500.
This table compares Independent Bank Co.(MI) and First Hawaiian’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Independent Bank Co.(MI)||22.71%||12.72%||1.29%|
First Hawaiian beats Independent Bank Co.(MI) on 11 of the 17 factors compared between the two stocks.
Independent Bank Co.(MI) Company Profile
Independent Bank Corporation operates as the holding company for Independent Bank that provides various banking services to individuals and businesses in Michigan. The company offers checking and savings accounts, commercial lending, direct and indirect consumer financing, mortgage lending, and safe deposit box services, as well as automatic teller machines, and Internet and mobile banking services. It also provides title insurance, investment, and insurance brokerage services. The company offers its services through approximately 67 branches, 1 drive-thru facility, and 12 loan production offices. Independent Bank Corporation was founded in 1864 and is based in Grand Rapids, Michigan.
First Hawaiian Company Profile
First Hawaiian, Inc. operates as a bank holding company for First Hawaiian Bank that provides a range of banking services to consumer and commercial customers in the United States. It operates through Retail Banking and Commercial Banking segments. The company accepts various deposit products, such as checking and savings accounts, and time deposit accounts. Its lending activities include residential and commercial mortgage and real estate loans, home equity lines of credit, automobile loans and leases, personal lines of credit, installment loans, small business loans and leases, commercial lease financing, and auto dealer financing. The company also offers credit cards; and individual investment and financial planning, insurance protection, trust and estate, private banking, investment management, merchant processing, and retirement planning services. As of December 31, 2017, it operated 62 branches Oahu, Maui, Hawaii, Kauai, Guam, and Saipan. First Hawaiian, Inc. was formerly known as BancWest Corporation and changed its name to First Hawaiian, Inc. in April 2016. The company was founded in 1858 and is headquartered in Honolulu, Hawaii. First Hawaiian, Inc. is a subsidiary of BancWest Corporation.
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