Analyzing First Hawaiian (NASDAQ:FHB) & Bankwell Financial Group (NASDAQ:BWFG)

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

Insider and Institutional Ownership

35.8% of Bankwell Financial Group shares are held by institutional investors. Comparatively, 97.6% of First Hawaiian shares are held by institutional investors. 19.2% of Bankwell Financial Group shares are held by company insiders. Comparatively, 0.5% of First Hawaiian shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bankwell Financial Group	7.77%	5.74%	0.48%
First Hawaiian	18.83%	8.83%	0.93%

Analyst Ratings

This is a summary of current ratings and target prices for Bankwell Financial Group and First Hawaiian, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bankwell Financial Group	0	0	1	0	3.00
First Hawaiian	3	4	0	0	1.57

Bankwell Financial Group presently has a consensus price target of $40.00, indicating a potential upside of 21.21%. First Hawaiian has a consensus price target of $26.14, indicating a potential downside of 4.24%. Given Bankwell Financial Group’s stronger consensus rating and higher probable upside, analysts clearly believe Bankwell Financial Group is more favorable than First Hawaiian.

Earnings & Valuation

This table compares Bankwell Financial Group and First Hawaiian”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bankwell Financial Group	$193.30 million	1.34	$36.66 million	$1.95	16.92
First Hawaiian	$797.14 million	4.38	$234.98 million	$1.75	15.60

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

Volatility & Risk

Bankwell Financial Group has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500. Comparatively, First Hawaiian has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500.

Dividends

Bankwell Financial Group pays an annual dividend of $0.80 per share and has a dividend yield of 2.4%. First Hawaiian pays an annual dividend of $1.04 per share and has a dividend yield of 3.8%. Bankwell Financial Group pays out 41.0% of its earnings in the form of a dividend. First Hawaiian pays out 59.4% 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.

Summary

First Hawaiian beats Bankwell Financial Group on 9 of the 16 factors compared between the two stocks.

About Bankwell Financial Group

Bankwell Financial Group, Inc. operates as the bank holding company for Bankwell Bank that provides various banking services for individual and commercial customers. It offers various traditional depository products, including checking, savings, money market, and certificates of deposit. The company also provides first mortgage loans secured by one-to-four family owner occupied residential properties for personal use; home equity loans and home equity lines of credit secured by owner occupied one-to-four family residential properties; loans secured by commercial real estate, multi-family dwellings, owner-occupied commercial real estate, and investor-owned one-to-four family dwellings; commercial construction loans for commercial development projects, including apartment buildings and condominiums, as well as office buildings, retail, and other income producing properties; land loans; commercial business loans secured by assignments of corporate assets and personal guarantees of the business owners; loans to finance insurance premiums; overdraft lines of credit; and unsecured personal loans. It operates branches in New Canaan, Stamford, Fairfield, Westport, Darien, Norwalk, and Hamden, Connecticut. The company was formerly known as BNC Financial Group, Inc. and changed its name to Bankwell Financial Group, Inc. in September 2013. Bankwell Financial Group, Inc. was founded in 2002 and is headquartered in New Canaan, Connecticut.

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.