Analyzing FS Bancorp (NASDAQ:FSBW) & First Hawaiian (NASDAQ:FHB)

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

Analyst Recommendations

This is a summary of current ratings for First Hawaiian and FS Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Hawaiian	3	7	0	0	1.70
FS Bancorp	0	1	1	0	2.50

First Hawaiian presently has a consensus target price of $27.64, suggesting a potential upside of 2.72%. FS Bancorp has a consensus target price of $41.00, suggesting a potential downside of 1.35%. Given First Hawaiian’s higher possible upside, equities analysts plainly believe First Hawaiian is more favorable than FS Bancorp.

Valuation and Earnings

This table compares First Hawaiian and FS Bancorp”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	2.86	$230.13 million	$2.05	13.13
FS Bancorp	$206.39 million	1.51	$35.02 million	$4.10	10.14

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

Dividends

First Hawaiian pays an annual dividend of $1.04 per share and has a dividend yield of 3.9%. FS Bancorp pays an annual dividend of $1.12 per share and has a dividend yield of 2.7%. First Hawaiian pays out 50.7% of its earnings in the form of a dividend. FS Bancorp pays out 27.3% 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. FS Bancorp has raised its dividend for 12 consecutive years.

Institutional and Insider Ownership

97.6% of First Hawaiian shares are held by institutional investors. Comparatively, 63.9% of FS Bancorp shares are held by institutional investors. 0.6% of First Hawaiian shares are held by insiders. Comparatively, 12.7% of FS Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility & Risk

First Hawaiian has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500. Comparatively, FS Bancorp has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Hawaiian	22.60%	9.68%	1.08%
FS Bancorp	15.10%	10.84%	1.04%

Summary

First Hawaiian beats FS Bancorp on 10 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 FS Bancorp

FS Bancorp, Inc. operates as a bank holding company for 1st Security Bank of Washington that provides banking and financial services to local families, local and regional businesses, and industry niches. The company operates in two segments, Commercial and Consumer Banking; and Home Lending. It offers various deposit instruments, including checking accounts, money market deposit accounts, savings accounts, and certificates of deposit. The company provides one-to-four-family residential first mortgages, second mortgage/home equity loan products, non-mortgage commercial business loans, commercial real estate loans, and construction and development loans, as well as consumer loans, which primarily include personal lines of credit, credit cards, automobile, direct home improvement, loans on deposit, and recreational loans. It operates full bank service branches and home loan production offices in suburban communities in the greater Puget Sound area, including Snohomish, King, Pierce, Jefferson, Kitsap, Clallam, Grays Harbor, and Thurston counties; and a loan production office in the market area of the Tri-Cities. FS Bancorp, Inc. was founded in 1936 and is headquartered in Mountlake Terrace, Washington.