Financial Contrast: Columbia Banking System (NASDAQ:COLB) versus First Hawaiian (NASDAQ:FHB)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Columbia Banking System	17.11%	11.40%	1.26%
First Hawaiian	23.65%	10.19%	1.16%

Earnings and Valuation

This table compares Columbia Banking System and First Hawaiian”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Columbia Banking System	$3.21 billion	2.61	$550.00 million	$2.26	12.82
First Hawaiian	$847.43 million	3.80	$276.27 million	$2.20	11.92

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

Volatility & Risk

Columbia Banking System has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500. Comparatively, First Hawaiian has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500.

Dividends

Columbia Banking System pays an annual dividend of $1.48 per share and has a dividend yield of 5.1%. First Hawaiian pays an annual dividend of $1.04 per share and has a dividend yield of 4.0%. Columbia Banking System pays out 65.5% of its earnings in the form of a dividend. First Hawaiian pays out 47.3% 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. Columbia Banking System has raised its dividend for 4 consecutive years. Columbia Banking System is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current recommendations for Columbia Banking System and First Hawaiian, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Columbia Banking System	0	10	4	1	2.40
First Hawaiian	3	5	1	0	1.78

Columbia Banking System presently has a consensus price target of $31.58, indicating a potential upside of 9.00%. First Hawaiian has a consensus price target of $26.93, indicating a potential upside of 2.66%. Given Columbia Banking System’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Columbia Banking System is more favorable than First Hawaiian.

Insider and Institutional Ownership

92.5% of Columbia Banking System shares are owned by institutional investors. Comparatively, 97.6% of First Hawaiian shares are owned by institutional investors. 0.6% of Columbia Banking System shares are owned by insiders. Comparatively, 0.7% of First Hawaiian shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Columbia Banking System beats First Hawaiian on 12 of the 18 factors compared between the two stocks.

About Columbia Banking System

Columbia Banking System, Inc. operates as the holding company of Umpqua Bank that provides banking, private banking, mortgage, and other financial services in the United States. The company offers deposit products, including business, non-interest bearing checking, interest-bearing checking and savings, money market, and certificate of deposit accounts; and insured cash sweep and other investment sweep solutions. It also provides commercial lending products, such as commercial lines of credit and term loans, accounts receivable and inventory financing, international trade finance, commercial property loans, multifamily loans, equipment loans, commercial equipment leases, real estate construction loans and permanent financing, and small business administration program financing, as well as capital markets. In addition, the company offers wealth management comprising financial planning, investment, trust, and insurance; treasury management, which includes digital and mobile banking solutions, ACH, wires, positive pay, remote deposit capture, integrated payments, integrated receivables, lockbox, cash vault, real-time payments, commercial card, and foreign exchange and international banking related products, as well as merchant services; and brokerage services, residential real estate loans and consumer loans. It serves its products to corporate, institutional, small business, and individual customers. The company was founded in 1953 and is headquartered in Tacoma, Washington.

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.