Financial Survey: Independent Bank (NASDAQ:INDB) and First Hawaiian (NASDAQ:FHB)

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

Volatility and Risk

Independent Bank has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500. Comparatively, First Hawaiian has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500.

Valuation & Earnings

This table compares Independent Bank and First Hawaiian’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Independent Bank	$920.34 million	2.19	$239.50 million	$5.18	9.14
First Hawaiian	$1.12 billion	2.33	$234.98 million	$1.74	11.78

Independent Bank has higher earnings, but lower revenue than First Hawaiian. Independent Bank 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 Independent Bank and First Hawaiian’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Independent Bank	23.97%	7.85%	1.17%
First Hawaiian	19.20%	9.16%	0.90%

Analyst Ratings

This is a summary of current ratings and recommmendations for Independent Bank and First Hawaiian, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Independent Bank	0	2	0	0	2.00
First Hawaiian	2	1	0	0	1.33

Independent Bank presently has a consensus target price of $60.00, suggesting a potential upside of 26.66%. First Hawaiian has a consensus target price of $21.50, suggesting a potential upside of 4.93%. Given Independent Bank’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Independent Bank is more favorable than First Hawaiian.

Insider and Institutional Ownership

83.4% of Independent Bank shares are held by institutional investors. Comparatively, 97.6% of First Hawaiian shares are held by institutional investors. 1.0% of Independent Bank shares are held by insiders. Comparatively, 0.5% of First Hawaiian shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Independent Bank pays an annual dividend of $2.28 per share and has a dividend yield of 4.8%. First Hawaiian pays an annual dividend of $1.04 per share and has a dividend yield of 5.1%. Independent Bank pays out 44.0% of its earnings in the form of a dividend. First Hawaiian pays out 59.8% 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. Independent Bank has increased its dividend for 14 consecutive years.

Summary

Independent Bank beats First Hawaiian on 9 of the 16 factors compared between the two stocks.

About Independent Bank

Independent Bank Corp. operates as the bank holding company for Rockland Trust Company that provides commercial banking products and services to individuals and small-to-medium sized businesses in the United States. The company provides interest checking, money market, and savings accounts, as well as demand deposits and time certificates of deposit. It offers commercial real estate and construction, commercial and industrial, small business, secured and unsecured commercial, and consumer real estate loans; term loans and revolving/nonrevolving lines of credit; overdraft protection and letters of credit; and residential mortgages and home equity loans and lines. In addition, the company provides cash management services, such as ACH transaction processing, positive pay, and remote deposit services; investment management and trust services to individuals, institutions, small businesses, and charitable institutions; mobile, online, and telephone banking; estate settlement, financial planning, tax services, and other services; automated teller machines; debit and credit cards; and mutual fund and unit investment trust shares, third party model portfolios, general securities, fixed and variable annuities, and life insurance products, as well as advisory platforms. Further, it invests in low-income housing tax credit projects; holds, maintains, and disposes foreclosed properties; and operates as an investment advisor. Independent Bank Corp. was founded in 1907 and is headquartered in Rockland, Massachusetts.

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.