Reviewing Bank of Hawaii (NYSE:BOH) and Western Alliance Bancorporation (NYSE:WAL)

Bank of Hawaii (NYSE:BOH) and Western Alliance Bancorporation (NYSE:WAL) are both mid-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, dividends and risk.

Valuation & Earnings

This table compares Bank of Hawaii and Western Alliance Bancorporation”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	$1.04 billion	2.35	$149.99 million	$3.81	16.08
Western Alliance Bancorporation	$5.08 billion	1.66	$787.70 million	$7.61	10.03

Western Alliance Bancorporation has higher revenue and earnings than Bank of Hawaii. Western Alliance Bancorporation 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.

Risk & Volatility

Bank of Hawaii has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500. Comparatively, Western Alliance Bancorporation has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500.

Dividends

Bank of Hawaii pays an annual dividend of $2.80 per share and has a dividend yield of 4.6%. Western Alliance Bancorporation pays an annual dividend of $1.52 per share and has a dividend yield of 2.0%. Bank of Hawaii pays out 73.5% of its earnings in the form of a dividend. Western Alliance Bancorporation pays out 20.0% 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 and Western Alliance Bancorporation has raised its dividend for 5 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and price targets for Bank of Hawaii and Western Alliance Bancorporation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of Hawaii	2	2	1	0	1.80
Western Alliance Bancorporation	0	1	12	0	2.92

Bank of Hawaii currently has a consensus price target of $74.40, indicating a potential upside of 21.41%. Western Alliance Bancorporation has a consensus price target of $96.62, indicating a potential upside of 26.58%. Given Western Alliance Bancorporation’s stronger consensus rating and higher possible upside, analysts clearly believe Western Alliance Bancorporation is more favorable than Bank of Hawaii.

Institutional & Insider Ownership

82.2% of Bank of Hawaii shares are held by institutional investors. Comparatively, 79.2% of Western Alliance Bancorporation shares are held by institutional investors. 2.1% of Bank of Hawaii shares are held by company insiders. Comparatively, 2.7% of Western Alliance Bancorporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Bank of Hawaii and Western Alliance Bancorporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of Hawaii	16.30%	12.67%	0.72%
Western Alliance Bancorporation	16.39%	12.62%	1.02%

Summary

Western Alliance Bancorporation beats Bank of Hawaii on 12 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 Western Alliance Bancorporation

Western Alliance Bancorporation operates as the bank holding company for Western Alliance Bank that provides various banking products and related services primarily in Arizona, California, and Nevada. It operates through Commercial and Consumer Related segments. The company offers deposit products, including checking, savings, and money market accounts, as well as fixed-rate and fixed maturity certificates of deposit accounts; demand deposits; and treasury management and residential mortgage products and services. It also provides commercial and industrial loan products, such as working capital lines of credit, loans to technology companies, inventory and accounts receivable lines, mortgage warehouse lines, equipment loans and leases, and other commercial loans; commercial real estate loans, which are secured by multi-family residential properties, professional offices, industrial facilities, retail centers, hotels, and other commercial properties; construction and land development loans for single family and multi-family residential projects, industrial/warehouse properties, office buildings, retail centers, medical office facilities, and residential lot developments; and consumer loans. In addition, the company provides other financial services, such as internet banking, wire transfers, electronic bill payment and presentment, funds transfer and other digital payment offerings, lock box services, courier, and cash management services. Further, the company holds certain investment securities, municipal and non-profit loans, and leases; invests primarily in low-income housing tax credits and small business investment corporations; and holds certain real estate loans and related securities. Western Alliance Bancorporation was founded in 1994 and is headquartered in Phoenix, Arizona.