Reviewing Five Star Bancorp (NASDAQ:FSBC) & Bank of Hawaii (NYSE:BOH)

Bank of Hawaii (NYSE:BOH) and Five Star Bancorp (NASDAQ:FSBC) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, valuation, earnings, risk and institutional ownership.

Institutional & Insider Ownership

82.2% of Bank of Hawaii shares are held by institutional investors. Comparatively, 46.9% of Five Star Bancorp shares are held by institutional investors. 2.0% of Bank of Hawaii shares are held by company insiders. Comparatively, 21.8% of Five Star Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Bank of Hawaii has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500. Comparatively, Five Star Bancorp has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Bank of Hawaii and Five Star Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of Hawaii	0	4	3	0	2.43
Five Star Bancorp	0	2	4	0	2.67

Bank of Hawaii presently has a consensus target price of $85.40, suggesting a potential upside of 14.63%. Five Star Bancorp has a consensus target price of $42.30, suggesting a potential upside of 0.88%. Given Bank of Hawaii’s higher probable upside, equities analysts plainly believe Bank of Hawaii is more favorable than Five Star Bancorp.

Profitability

This table compares Bank of Hawaii and Five Star Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of Hawaii	20.46%	14.97%	0.92%
Five Star Bancorp	25.23%	15.32%	1.42%

Dividends

Bank of Hawaii pays an annual dividend of $2.80 per share and has a dividend yield of 3.8%. Five Star Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 2.4%. Bank of Hawaii pays out 56.6% of its earnings in the form of a dividend. Five Star Bancorp pays out 31.7% 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. Bank of Hawaii is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Bank of Hawaii and Five Star Bancorp”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	$1.07 billion	2.77	$205.90 million	$4.95	15.05
Five Star Bancorp	$255.47 million	3.51	$61.61 million	$3.15	13.31

Bank of Hawaii has higher revenue and earnings than Five Star Bancorp. Five Star Bancorp 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.

Summary

Bank of Hawaii beats Five Star Bancorp on 9 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 Five Star Bancorp

Five Star Bancorp operates as the bank holding company for Five Star Bank that provides a range of banking products and services to small and medium-sized businesses, professionals, and individuals in Northern California. It accepts various deposits, such as money market accounts, noninterest-bearing and interest checking accounts, savings accounts, term certificate accounts, and time deposits. The company also offers loan products, including commercial and residential real estate loans; commercial loans; commercial land loans; farmland loans; commercial and residential construction loans; and consumer and other loans, as well as operating lines of credit. In addition, it provides debit cards; and remote deposit capture, online and mobile banking, and direct deposit services. Five Star Bancorp was founded in 1999 and is headquartered in Rancho Cordova, California.