Five Star Bancorp (NASDAQ:FSBC) & Bank of Hawaii (NYSE:BOH) Critical Review

Bank of Hawaii (NYSE:BOH) and Five Star Bancorp (NASDAQ:FSBC) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.

Dividends

Bank of Hawaii pays an annual dividend of $2.80 per share and has a dividend yield of 3.6%. Five Star Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 2.4%. Bank of Hawaii pays out 56.6% of its earnings in the form of a dividend. Five Star Bancorp pays out 31.7% 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 has raised its dividend for 1 consecutive years. Bank of Hawaii is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

82.2% of Bank of Hawaii shares are owned by institutional investors. Comparatively, 46.9% of Five Star Bancorp shares are owned by institutional investors. 2.0% of Bank of Hawaii shares are owned by company insiders. Comparatively, 21.8% of Five Star Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Bank of Hawaii has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500. Comparatively, Five Star Bancorp has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500.

Valuation & Earnings

This table compares Bank of Hawaii and Five Star Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of Hawaii	$1.07 billion	2.88	$205.90 million	$4.95	15.69
Five Star Bancorp	$166.85 million	5.35	$61.61 million	$3.15	13.25

Bank of Hawaii has higher revenue and earnings than Five Star Bancorp. Five Star 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bank of Hawaii	20.46%	14.97%	0.92%
Five Star Bancorp	25.23%	15.32%	1.42%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Bank of Hawaii and Five Star Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of Hawaii	0	4	3	0	2.43
Five Star Bancorp	0	2	4	0	2.67

Bank of Hawaii currently has a consensus price target of $85.40, suggesting a potential upside of 9.97%. Five Star Bancorp has a consensus price target of $42.30, suggesting a potential upside of 1.35%. Given Bank of Hawaii’s higher probable upside, equities research analysts clearly believe Bank of Hawaii is more favorable than Five Star Bancorp.

Summary

Bank of Hawaii beats Five Star Bancorp on 9 of the 17 factors compared between the two stocks.

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.

About Five Star Bancorp

Five Star Bancorp operates as the bank holding company for Five Star Bank that provides a range of banking products and services to small and medium-sized businesses, professionals, and individuals in Northern California. It accepts various deposits, such as money market accounts, noninterest-bearing and interest checking accounts, savings accounts, term certificate accounts, and time deposits. The company also offers loan products, including commercial and residential real estate loans; commercial loans; commercial land loans; farmland loans; commercial and residential construction loans; and consumer and other loans, as well as operating lines of credit. In addition, it provides debit cards; and remote deposit capture, online and mobile banking, and direct deposit services. Five Star Bancorp was founded in 1999 and is headquartered in Rancho Cordova, California.