Hanmi Financial (NASDAQ:HAFC) versus First Hawaiian (NASDAQ:FHB) Head-To-Head Comparison

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

Risk and Volatility

First Hawaiian has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500. Comparatively, Hanmi Financial has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500.

Institutional and Insider Ownership

97.6% of First Hawaiian shares are owned by institutional investors. Comparatively, 88.7% of Hanmi Financial shares are owned by institutional investors. 0.6% of First Hawaiian shares are owned by company insiders. Comparatively, 1.9% of Hanmi Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

First Hawaiian pays an annual dividend of $1.04 per share and has a dividend yield of 4.3%. Hanmi Financial pays an annual dividend of $1.12 per share and has a dividend yield of 4.4%. First Hawaiian pays out 47.3% of its earnings in the form of a dividend. Hanmi Financial pays out 44.6% 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. Hanmi Financial has increased its dividend for 1 consecutive years. Hanmi Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares First Hawaiian and Hanmi Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Hawaiian	$1.17 billion	2.52	$276.27 million	$2.20	10.89
Hanmi Financial	$444.90 million	1.71	$76.09 million	$2.51	10.12

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Hawaiian	23.65%	10.19%	1.16%
Hanmi Financial	17.10%	9.85%	0.97%

Analyst Ratings

This is a summary of recent ratings and recommmendations for First Hawaiian and Hanmi Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Hawaiian	3	5	1	0	1.78
Hanmi Financial	0	3	2	0	2.40

First Hawaiian currently has a consensus target price of $27.50, suggesting a potential upside of 14.82%. Hanmi Financial has a consensus target price of $31.33, suggesting a potential upside of 23.41%. Given Hanmi Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Hanmi Financial is more favorable than First Hawaiian.

Summary

Hanmi Financial beats First Hawaiian on 9 of the 17 factors compared between 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 Hanmi Financial

Hanmi Financial Corporation operates as the holding company for Hanmi Bank that provides business banking products and services in the United States. It offers various deposit products, including noninterest-bearing checking accounts, savings accounts, negotiable order of withdrawal accounts, money market accounts, and certificates of deposit. The company also provides real estate loans, such as commercial property, construction, and residential property loans; and commercial and industrial loans, such as commercial term loans and commercial lines of credit; and international finance and trade services and products, such as letters of credit, and import and export financing. In addition, it offers small business administration loans for business purposes, which comprise owner-occupied commercial real estate, business acquisitions, start-ups, franchise financing, working capital, improvements and renovations, inventory and equipment, and debt-refinancing, as well as equipment lease financing. The company was founded in 1982 and is headquartered in Los Angeles, California.