Nicolet Bankshares (NYSE:NIC) vs. Bank of Hawaii (NYSE:BOH) Critical Review

Nicolet Bankshares (NYSE:NIC) and Bank of Hawaii (NYSE:BOH) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Volatility & Risk

Nicolet Bankshares has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500. Comparatively, Bank of Hawaii has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500.

Institutional and Insider Ownership

43.1% of Nicolet Bankshares shares are held by institutional investors. Comparatively, 82.2% of Bank of Hawaii shares are held by institutional investors. 7.2% of Nicolet Bankshares shares are held by company insiders. Comparatively, 2.0% of Bank of Hawaii shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Nicolet Bankshares and Bank of Hawaii”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nicolet Bankshares	$590.98 million	6.08	$150.69 million	$9.04	18.97
Bank of Hawaii	$1.07 billion	2.61	$205.90 million	$5.36	13.17

Bank of Hawaii has higher revenue and earnings than Nicolet Bankshares. Bank of Hawaii is trading at a lower price-to-earnings ratio than Nicolet Bankshares, indicating that it is currently the more affordable of the two stocks.

Dividends

Nicolet Bankshares pays an annual dividend of $1.44 per share and has a dividend yield of 0.8%. Bank of Hawaii pays an annual dividend of $2.80 per share and has a dividend yield of 4.0%. Nicolet Bankshares pays out 15.9% of its earnings in the form of a dividend. Bank of Hawaii pays out 52.2% 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. Nicolet Bankshares has raised its dividend for 2 consecutive years and Bank of Hawaii has raised its dividend for 1 consecutive years.

Profitability

This table compares Nicolet Bankshares and Bank of Hawaii’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nicolet Bankshares	22.11%	11.71%	1.69%
Bank of Hawaii	21.84%	15.72%	0.98%

Analyst Ratings

This is a summary of recent recommendations for Nicolet Bankshares and Bank of Hawaii, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nicolet Bankshares	0	3	4	1	2.75
Bank of Hawaii	0	6	2	0	2.25

Nicolet Bankshares currently has a consensus target price of $184.80, suggesting a potential upside of 7.75%. Bank of Hawaii has a consensus target price of $85.00, suggesting a potential upside of 20.45%. Given Bank of Hawaii’s higher probable upside, analysts plainly believe Bank of Hawaii is more favorable than Nicolet Bankshares.

Summary

Nicolet Bankshares beats Bank of Hawaii on 11 of the 18 factors compared between the two stocks.

About Nicolet Bankshares

Nicolet Bankshares, Inc. operates as the bank holding company for Nicolet National Bank that provides banking products and services for businesses and individuals in Wisconsin and Michigan. The company accepts checking, savings, and money market accounts; various certificates of deposit; and individual retirement accounts. It also offers commercial loans, including commercial, industrial, and business loans and lines of credit; commercial real estate loans; agricultural (AG) production and AG real estate loans; commercial real estate investment real estate loans; construction and land development loans; residential real estate loans, such as residential first lien and junior lien mortgages, home equity loans, lines of credit, and residential construction loans; and consumer loans. In addition, the company provides cash management, international banking, personal brokerage, safe deposit boxes, and trust and fiduciary services, as well as wealth management and retirement plan services. Further, it offers mortgage refinancing; online services, such as commercial, retail, and trust online banking; automated bill payment, mobile banking deposits and account access, and remote deposit capture services; and other services consisting of wire transfers, debit cards, credit cards, pre-paid gift cards, direct deposits, and official bank checks, as well as facilitates crop insurance products. The company was formerly known as Green Bay Financial Corporation and changed its name to Nicolet Bankshares, Inc. in March 2002. The company was incorporated in 2000 and is headquartered in Green Bay, Wisconsin.

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.