Contrasting First Hawaiian (NASDAQ:FHB) & Bank of Marin Bancorp (NASDAQ:BMRC)

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

Dividends

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

Profitability

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

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

Earnings & Valuation

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

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

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.

Analyst Ratings

This is a breakdown of current ratings and price targets for Bank of Marin Bancorp and First Hawaiian, as reported by MarketBeat.com.

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

Bank of Marin Bancorp presently has a consensus price target of $28.40, suggesting a potential upside of 8.07%. First Hawaiian has a consensus price target of $27.56, suggesting a potential downside of 3.93%. 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.

Institutional & Insider Ownership

52.3% of Bank of Marin Bancorp shares are owned by institutional investors. Comparatively, 97.6% of First Hawaiian shares are owned by institutional investors. 5.7% of Bank of Marin Bancorp shares are owned by insiders. Comparatively, 0.7% of First Hawaiian shares are owned by 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 & Volatility

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

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.

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.