Bank of Hawaii (NYSE: BOH) and Bank Mutual (NASDAQ:BKMU) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, profitability, valuation and risk.

Analyst Ratings

This is a summary of recent ratings and price targets for Bank of Hawaii and Bank Mutual, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank of Hawaii 1 4 0 0 1.80
Bank Mutual 0 2 0 0 2.00

Bank of Hawaii currently has a consensus target price of $86.50, suggesting a potential upside of 8.26%. Bank Mutual has a consensus target price of $10.75, suggesting a potential upside of 4.88%. Given Bank of Hawaii’s higher possible upside, equities research analysts plainly believe Bank of Hawaii is more favorable than Bank Mutual.

Volatility & Risk

Bank of Hawaii has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500. Comparatively, Bank Mutual has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500.

Valuation and Earnings

This table compares Bank of Hawaii and Bank Mutual’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Bank of Hawaii $655.24 million 5.18 $181.46 million $4.35 18.37
Bank Mutual $109.99 million 4.29 $16.95 million $0.34 30.15

Bank of Hawaii has higher revenue and earnings than Bank Mutual. Bank of Hawaii is trading at a lower price-to-earnings ratio than Bank Mutual, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

75.7% of Bank of Hawaii shares are held by institutional investors. Comparatively, 55.4% of Bank Mutual shares are held by institutional investors. 2.2% of Bank of Hawaii shares are held by insiders. Comparatively, 10.0% of Bank Mutual shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Bank of Hawaii pays an annual dividend of $2.08 per share and has a dividend yield of 2.6%. Bank Mutual pays an annual dividend of $0.22 per share and has a dividend yield of 2.1%. Bank of Hawaii pays out 47.8% of its earnings in the form of a dividend. Bank Mutual pays out 64.7% 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. Bank of Hawaii is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Bank of Hawaii and Bank Mutual’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank of Hawaii 27.27% 15.45% 1.10%
Bank Mutual 14.19% 5.72% 0.62%

Summary

Bank of Hawaii beats Bank Mutual on 12 of the 15 factors compared between the two stocks.

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.

Bank Mutual Company Profile

Bank Mutual Corporation is a savings and loan holding company. The Company owns Bank Mutual (the Bank), a federally-chartered savings bank. The Bank is engaged in the business of community banking, which includes attracting deposits from and making loans to the general public and private businesses, as well as governmental and non-profit entities. In addition to deposits, the Bank obtains funds through borrowings from the Federal Home Loan Bank (FHLB) of Chicago. These funding sources are used to originate loans, including commercial and industrial loans, multi-family residential loans, non-residential commercial real estate loans, one- to four-family loans, home equity loans and other consumer loans. The Bank also purchases and/or participates in loans from third-party financial institutions and is a seller of residential loans in the secondary market. It also invests in mortgage-related and other investment securities.

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