Bank of Hawaii (NYSE:BOH) versus Sound Financial Bancorp (NASDAQ:SFBC) Financial Review

Sound Financial Bancorp (NASDAQ:SFBC) and Bank of Hawaii (NYSE:BOH) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, risk, valuation and profitability.

Volatility and Risk

Sound Financial Bancorp has a beta of 0.1, meaning that its share price is 90% less volatile than the S&P 500. Comparatively, Bank of Hawaii has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Sound Financial Bancorp and Bank of Hawaii, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sound Financial Bancorp	0	1	0	0	2.00
Bank of Hawaii	1	3	1	0	2.00

Bank of Hawaii has a consensus price target of $71.25, suggesting a potential upside of 2.19%. Given Bank of Hawaii’s higher probable upside, analysts plainly believe Bank of Hawaii is more favorable than Sound Financial Bancorp.

Dividends

Sound Financial Bancorp pays an annual dividend of $0.76 per share and has a dividend yield of 1.7%. Bank of Hawaii pays an annual dividend of $2.80 per share and has a dividend yield of 4.0%. Sound Financial Bancorp pays out 28.8% of its earnings in the form of a dividend. Bank of Hawaii pays out 68.6% 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. Sound Financial Bancorp has raised its dividend for 2 consecutive years and Bank of Hawaii has raised its dividend for 1 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sound Financial Bancorp	10.97%	6.48%	0.65%
Bank of Hawaii	17.41%	13.33%	0.77%

Earnings and Valuation

This table compares Sound Financial Bancorp and Bank of Hawaii”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sound Financial Bancorp	$38.75 million	2.90	$4.64 million	$2.64	16.61
Bank of Hawaii	$683.29 million	4.06	$149.99 million	$4.08	17.09

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

Institutional and Insider Ownership

68.8% of Sound Financial Bancorp shares are held by institutional investors. Comparatively, 82.2% of Bank of Hawaii shares are held by institutional investors. 12.4% of Sound Financial Bancorp shares are held by company insiders. Comparatively, 2.1% of Bank of Hawaii shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Bank of Hawaii beats Sound Financial Bancorp on 13 of the 16 factors compared between the two stocks.

About Sound Financial Bancorp

Sound Financial Bancorp, Inc. operates as the bank holding company for Sound Community Bank that provides banking and other financial services for consumers and businesses. It accepts various deposits products comprising savings, money market deposit, NOW, and demand accounts, as well as certificates of deposit. The company also offers loans secured by first and second mortgages on one-to four-family residences; home equity loans, including fixed-rate loans and variable-rate lines of credit; commercial and multifamily real estate loans; construction loans secured by single-family residences, and commercial and multifamily real estate; land loans; commercial business loans to finance commercial vehicles and equipment, as well as loans secured by accounts receivable and/or inventory; and secured and unsecured consumer loans, such as new and used manufactured homes, floating homes, automobiles, boats, and recreational vehicle loans, and loans secured by deposit accounts. The company was founded in 1953 and is headquartered in Seattle, Washington.

About Bank of Hawaii

Bank of Hawaii Corporation operates as the bank holding company for Bank of Hawaii that provides various financial products and services in Hawaii, Guam, and other Pacific Islands. It operates in three segments: Consumer Banking, Commercial Banking, and Treasury and Other. The Consumer Banking segment offers checking, savings, and time deposit accounts; residential mortgage loans, home equity lines of credit, automobile loans and leases, overdraft lines of credit, installment loans, small business loans and leases, and credit cards; private and international client banking, investment, credit, and trust services to individuals and families, as well as high-net-worth individuals; investment management; institutional investment advisory services to corporations, government entities, and foundations; and brokerage offerings, including equities, mutual funds, life insurance, and annuity products. The Commercial Banking segment provides corporate banking, commercial real estate loans, commercial lease financing, auto dealer financing, and deposit products. This segment also offers commercial lending and deposit products to middle-market and large companies, and government entities; commercial real estate mortgages to investors, developers, and builders; and international banking and merchant services. The Treasury and Other segment provides corporate asset and liability management services, including interest rate risk management and foreign exchange services. Bank of Hawaii Corporation was founded in 1897 and is headquartered in Honolulu, Hawaii.