Bankwell Financial Group (NASDAQ:BWFG) and First Hawaiian (NASDAQ:FHB) Financial Contrast

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for First Hawaiian and Bankwell Financial Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Hawaiian	3	4	0	0	1.57
Bankwell Financial Group	0	0	1	0	3.00

First Hawaiian currently has a consensus price target of $26.14, suggesting a potential downside of 4.66%. Bankwell Financial Group has a consensus price target of $40.00, suggesting a potential upside of 22.59%. Given Bankwell Financial Group’s stronger consensus rating and higher probable upside, analysts plainly believe Bankwell Financial Group is more favorable than First Hawaiian.

Volatility and Risk

First Hawaiian has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, Bankwell Financial Group has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500.

Valuation & Earnings

This table compares First Hawaiian and Bankwell Financial Group”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	$1.12 billion	3.12	$234.98 million	$1.75	15.67
Bankwell Financial Group	$193.30 million	1.33	$36.66 million	$1.95	16.73

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Hawaiian	18.83%	8.83%	0.93%
Bankwell Financial Group	7.77%	5.74%	0.48%

Dividends

First Hawaiian pays an annual dividend of $1.04 per share and has a dividend yield of 3.8%. Bankwell Financial Group pays an annual dividend of $0.80 per share and has a dividend yield of 2.5%. First Hawaiian pays out 59.4% of its earnings in the form of a dividend. Bankwell Financial Group pays out 41.0% 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.

Institutional and Insider Ownership

97.6% of First Hawaiian shares are held by institutional investors. Comparatively, 35.8% of Bankwell Financial Group shares are held by institutional investors. 0.5% of First Hawaiian shares are held by insiders. Comparatively, 19.2% of Bankwell Financial Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

First Hawaiian beats Bankwell Financial Group on 9 of the 16 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 Bankwell Financial Group

Bankwell Financial Group, Inc. operates as the bank holding company for Bankwell Bank that provides various banking services for individual and commercial customers. It offers various traditional depository products, including checking, savings, money market, and certificates of deposit. The company also provides first mortgage loans secured by one-to-four family owner occupied residential properties for personal use; home equity loans and home equity lines of credit secured by owner occupied one-to-four family residential properties; loans secured by commercial real estate, multi-family dwellings, owner-occupied commercial real estate, and investor-owned one-to-four family dwellings; commercial construction loans for commercial development projects, including apartment buildings and condominiums, as well as office buildings, retail, and other income producing properties; land loans; commercial business loans secured by assignments of corporate assets and personal guarantees of the business owners; loans to finance insurance premiums; overdraft lines of credit; and unsecured personal loans. It operates branches in New Canaan, Stamford, Fairfield, Westport, Darien, Norwalk, and Hamden, Connecticut. The company was formerly known as BNC Financial Group, Inc. and changed its name to Bankwell Financial Group, Inc. in September 2013. Bankwell Financial Group, Inc. was founded in 2002 and is headquartered in New Canaan, Connecticut.