Comparing First Hawaiian (NASDAQ:FHB) & Independent Bank (NASDAQ:INDB)

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

Analyst Ratings

This is a breakdown of current recommendations for First Hawaiian and Independent Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Hawaiian	2	2	0	0	1.50
Independent Bank	0	2	0	0	2.00

First Hawaiian currently has a consensus target price of $21.50, indicating a potential upside of 5.03%. Independent Bank has a consensus target price of $60.00, indicating a potential upside of 25.52%. Given Independent Bank’s stronger consensus rating and higher probable upside, analysts plainly believe Independent Bank is more favorable than First Hawaiian.

Risk & Volatility

First Hawaiian has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500. Comparatively, Independent Bank has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500.

Dividends

First Hawaiian pays an annual dividend of $1.04 per share and has a dividend yield of 5.1%. Independent Bank pays an annual dividend of $2.28 per share and has a dividend yield of 4.8%. First Hawaiian pays out 59.8% of its earnings in the form of a dividend. Independent Bank pays out 44.0% 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. Independent Bank has increased its dividend for 14 consecutive years.

Insider & Institutional Ownership

97.6% of First Hawaiian shares are owned by institutional investors. Comparatively, 83.4% of Independent Bank shares are owned by institutional investors. 0.5% of First Hawaiian shares are owned by company insiders. Comparatively, 0.9% of Independent Bank shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Hawaiian	19.20%	9.16%	0.90%
Independent Bank	23.97%	7.85%	1.17%

Earnings and Valuation

This table compares First Hawaiian and Independent Bank’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Hawaiian	$1.12 billion	2.33	$234.98 million	$1.74	11.76
Independent Bank	$920.34 million	2.21	$239.50 million	$5.18	9.23

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

Summary

Independent Bank beats First Hawaiian 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 Independent Bank

Independent Bank Corp. operates as the bank holding company for Rockland Trust Company that provides commercial banking products and services to individuals and small-to-medium sized businesses in the United States. The company provides interest checking, money market, and savings accounts, as well as demand deposits and time certificates of deposit. It offers commercial real estate and construction, commercial and industrial, small business, secured and unsecured commercial, and consumer real estate loans; term loans and revolving/nonrevolving lines of credit; overdraft protection and letters of credit; and residential mortgages and home equity loans and lines. In addition, the company provides cash management services, such as ACH transaction processing, positive pay, and remote deposit services; investment management and trust services to individuals, institutions, small businesses, and charitable institutions; mobile, online, and telephone banking; estate settlement, financial planning, tax services, and other services; automated teller machines; debit and credit cards; and mutual fund and unit investment trust shares, third party model portfolios, general securities, fixed and variable annuities, and life insurance products, as well as advisory platforms. Further, it invests in low-income housing tax credit projects; holds, maintains, and disposes foreclosed properties; and operates as an investment advisor. Independent Bank Corp. was founded in 1907 and is headquartered in Rockland, Massachusetts.