Head to Head Survey: City (NASDAQ:CHCO) & First Hawaiian (NASDAQ:FHB)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Hawaiian	24.41%	10.27%	1.19%
City	32.58%	16.34%	1.95%

Valuation & Earnings

This table compares First Hawaiian and City”s 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	2.66	$276.27 million	$2.30	11.09
City	$398.98 million	4.94	$130.49 million	$9.14	15.34

First Hawaiian has higher revenue and earnings than City. First Hawaiian is trading at a lower price-to-earnings ratio than City, 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 4.1%. City pays an annual dividend of $3.48 per share and has a dividend yield of 2.5%. First Hawaiian pays out 45.2% of its earnings in the form of a dividend. City pays out 38.1% 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. City has raised its dividend for 6 consecutive years.

Risk & Volatility

First Hawaiian has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, City has a beta of 0.48, suggesting that its share price is 52% less volatile than the S&P 500.

Insider and Institutional Ownership

97.6% of First Hawaiian shares are held by institutional investors. Comparatively, 72.4% of City shares are held by institutional investors. 0.7% of First Hawaiian shares are held by company insiders. Comparatively, 1.8% of City shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for First Hawaiian and City, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Hawaiian	3	6	2	0	1.91
City	0	3	1	0	2.25

First Hawaiian presently has a consensus target price of $30.25, indicating a potential upside of 18.63%. City has a consensus target price of $136.50, indicating a potential downside of 2.67%. Given First Hawaiian’s higher probable upside, equities research analysts plainly believe First Hawaiian is more favorable than City.

Summary

City beats First Hawaiian 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 City

City Holding Company operates as a holding company for City National Bank of West Virginia that provides various banking, trust, and investment management, and other financial solutions in the United States. The company offers checking, savings, and money market accounts, as well as certificates of deposit and individual retirement accounts. It also provides commercial and industrial loans that consist of loans to corporate and other legal entity borrowers primarily in small to mid-size industrial and commercial companies; commercial real estate loans comprising commercial mortgages, which are secured by nonresidential and multi-family residential properties; residential real estate loans to consumers for the purchase or refinance of residence; first-priority home equity loans; home equity lines of credit; amortized home equity loans; consumer loans that are secured and unsecured by automobiles, boats, recreational vehicles, certificates of deposit, and other personal property; and demand deposit account overdrafts, as well as owner-occupied real estate and construction, land development, and lines of credit. In addition, the company offers mortgage banking services, including fixed and adjustable-rate mortgages, construction financing, land loans, production of conventional and government-insured mortgages, secondary marketing, and mortgage servicing. Further, it provides deposit services for commercial customers comprising treasury management, lockbox, and other cash management services; merchant credit card services; wealth management, trust, investment, and custodial services for commercial and individual customers; and corporate trust and institutional custody, financial and estate planning, and retirement plan services, as well as automated-teller-machine, interactive-teller-machine, mobile banking, interactive voice response systems, and credit and debit card services. City Holding Company was founded in 1957 and is headquartered in Charleston, West Virginia.