Head-To-Head Analysis: First Hawaiian (NASDAQ:FHB) & Bank of Marin Bancorp (NASDAQ:BMRC)

First Hawaiian (NASDAQ:FHB) and Bank of Marin Bancorp (NASDAQ:BMRC) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, profitability, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares First Hawaiian and Bank of Marin Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Hawaiian	24.44%	10.39%	1.18%
Bank of Marin Bancorp	-18.58%	7.20%	0.78%

Dividends

First Hawaiian pays an annual dividend of $1.04 per share and has a dividend yield of 3.6%. Bank of Marin Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 3.8%. First Hawaiian pays out 45.6% of its earnings in the form of a dividend. Bank of Marin Bancorp pays out -49.5% 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. Bank of Marin Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

97.6% of First Hawaiian shares are held by institutional investors. Comparatively, 52.3% of Bank of Marin Bancorp shares are held by institutional investors. 0.7% of First Hawaiian shares are held by company insiders. Comparatively, 5.7% of Bank of Marin Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

First Hawaiian has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, Bank of Marin Bancorp has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for First Hawaiian and Bank of Marin Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Hawaiian	3	5	1	0	1.78
Bank of Marin Bancorp	2	2	2	0	2.00

First Hawaiian currently has a consensus price target of $27.56, suggesting a potential downside of 3.93%. Bank of Marin Bancorp has a consensus price target of $28.40, suggesting a potential upside of 8.07%. Given Bank of Marin Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe Bank of Marin Bancorp is more favorable than First Hawaiian.

Earnings and Valuation

This table compares First Hawaiian and Bank of Marin Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Hawaiian	$1.17 billion	2.99	$276.27 million	$2.28	12.58
Bank of Marin Bancorp	$163.98 million	2.59	-$35.67 million	($2.02)	-13.01

First Hawaiian has higher revenue and earnings than Bank of Marin Bancorp. Bank of Marin 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.

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 Bank of Marin Bancorp

Bank of Marin Bancorp operates as the holding company for Bank of Marin that provides a range of financial services primarily to small to medium-sized businesses, not-for-profit organizations, and commercial real estate investors in the United States. The company offers personal and business checking and savings accounts; and individual retirement, health savings, and demand deposit marketplace accounts, as well as time certificates of deposit, certificate of deposit account registry, and insured cash sweep services. It also provides commercial real estate, commercial and industrial, and consumer loans, as well as construction financing and home equity lines of credit. In addition, the company offers merchant and payroll services; commercial equipment leasing program; payment solutions; treasury management services; credit cards; and mobile deposit, remote deposit capture, automated clearing house, wire transfer, and image lockbox services. Further, it provides wealth management and trust services comprising customized investment portfolio management, financial planning, trust administration, estate settlement, and custody services, as well as 401(k) plan services; and automated teller machines, and telephone and digital banking services. The company was incorporated in 1989 and is headquartered in Novato, California.