Analyzing Sierra Bancorp (NASDAQ:BSRR) and First Hawaiian (NASDAQ:FHB)

Sierra Bancorp (NASDAQ:BSRR) 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 institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for Sierra Bancorp and First Hawaiian, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sierra Bancorp	0	1	2	1	3.00
First Hawaiian	3	6	0	0	1.67

Sierra Bancorp presently has a consensus target price of $38.50, suggesting a potential upside of 6.68%. First Hawaiian has a consensus target price of $27.50, suggesting a potential upside of 9.82%. Given First Hawaiian’s higher possible upside, analysts plainly believe First Hawaiian is more favorable than Sierra Bancorp.

Insider and Institutional Ownership

55.4% of Sierra Bancorp shares are owned by institutional investors. Comparatively, 97.6% of First Hawaiian shares are owned by institutional investors. 11.6% of Sierra Bancorp shares are owned by insiders. Comparatively, 0.6% of First Hawaiian shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Sierra Bancorp has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500. Comparatively, First Hawaiian has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500.

Dividends

Sierra Bancorp pays an annual dividend of $1.04 per share and has a dividend yield of 2.9%. First Hawaiian pays an annual dividend of $1.04 per share and has a dividend yield of 4.2%. Sierra Bancorp pays out 33.3% of its earnings in the form of a dividend. First Hawaiian pays out 47.3% 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. Sierra Bancorp has increased its dividend for 2 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sierra Bancorp	20.96%	11.90%	1.15%
First Hawaiian	23.65%	10.19%	1.16%

Earnings & Valuation

This table compares Sierra Bancorp and First Hawaiian”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sierra Bancorp	$201.98 million	2.38	$42.33 million	$3.12	11.57
First Hawaiian	$847.43 million	3.66	$276.27 million	$2.20	11.38

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

Summary

Sierra Bancorp beats First Hawaiian on 10 of the 18 factors compared between the two stocks.

About Sierra Bancorp

Sierra Bancorp operates as the bank holding company for Bank of the Sierra that provides retail and commercial banking services to individuals and businesses in California. It accepts various deposit products, such as checking accounts, savings accounts, money market demand accounts, time deposits, retirement accounts, and sweep accounts. The company's loan products include agricultural, commercial, consumer, real estate, construction, and mortgage loans. It also offers automated teller machines; electronic point-of-sale payment alternatives; online and automated telephone banking services; and remote deposit capture and automated payroll services for business customers. Sierra Bancorp was founded in 1977 and is headquartered in Porterville, California.

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.