First Hawaiian (NASDAQ:FHB) vs. Bank of Nova Scotia (NASDAQ:BNS) Head to Head Contrast

First Hawaiian (NASDAQ:FHB) and Bank of Nova Scotia (NYSE:BNS) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Institutional & Insider Ownership

95.9% of First Hawaiian shares are owned by institutional investors. Comparatively, 45.7% of Bank of Nova Scotia shares are owned by institutional investors. 0.2% of First Hawaiian shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

First Hawaiian has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, Bank of Nova Scotia has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500.

Earnings and Valuation

This table compares First Hawaiian and Bank of Nova Scotia’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Hawaiian $825.04 million 4.25 $264.39 million $2.09 12.58
Bank of Nova Scotia $31.11 billion 2.19 $6.64 billion $5.44 10.26

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for First Hawaiian and Bank of Nova Scotia, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Hawaiian 1 1 1 0 2.00
Bank of Nova Scotia 0 6 3 0 2.33

First Hawaiian presently has a consensus target price of $26.67, suggesting a potential upside of 1.43%. Bank of Nova Scotia has a consensus target price of $77.00, suggesting a potential upside of 37.94%. Given Bank of Nova Scotia’s stronger consensus rating and higher possible upside, analysts plainly believe Bank of Nova Scotia is more favorable than First Hawaiian.

Dividends

First Hawaiian pays an annual dividend of $1.04 per share and has a dividend yield of 4.0%. Bank of Nova Scotia pays an annual dividend of $2.72 per share and has a dividend yield of 4.9%. First Hawaiian pays out 49.8% of its earnings in the form of a dividend. Bank of Nova Scotia pays out 50.0% 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. Bank of Nova Scotia has increased its dividend for 2 consecutive years. Bank of Nova Scotia is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
First Hawaiian 31.56% 11.48% 1.44%
Bank of Nova Scotia 18.32% 13.53% 0.85%

Summary

Bank of Nova Scotia 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 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 accepts various deposit products, including checking and savings accounts, and time deposit accounts. It also provides residential and commercial mortgage loans, home equity lines of credit, automobile loans and leases, personal lines of credit, installment loans, and small business loans and leases, commercial lease financing, and auto dealer financing. In addition, the company offers personal installment, credit card, individual investment and financial planning, insurance protection, trust and estate, private banking, retirement planning, treasury, and merchant processing services. As of December 31, 2018, it operated 60 branches Oahu, Maui, Hawaii, Kauai, Guam, and Saipan. The company was formerly known as BancWest Corporation and changed its name to First Hawaiian, Inc. in April 2016. The company was founded in 1858 and is headquartered in Honolulu, Hawaii. First Hawaiian, Inc. is a subsidiary of BancWest Corporation.

About Bank of Nova Scotia

The Bank of Nova Scotia provides various banking products and services in North America, Latin America, the Caribbean and Central America, and the Asia-Pacific. The company offers financial advice and solutions, and day-to-day banking products, including debit and credit cards, chequing and saving accounts, investments, mortgages, loans, and related creditor insurance to individuals and small businesses; and commercial banking solutions comprising lending, deposit, cash management, and trade finance solutions to medium and large businesses, including automotive dealers and their customers. It is also involved in the provision of investment and wealth management advice, services, products, and solutions to customers and advisors; wealth management solutions, such as private customer, online brokerage, full-service brokerage, pension, and institutional customer services, as well as asset management business focusing on developing investment solutions for retail and institutional investors; and international banking services for retail, corporate, and commercial customers. In addition, the company offers corporate lending; trade finance and cash management; investment banking services, including corporate finance, and mergers and acquisitions; fixed income and equity underwriting, sales, trading, and research services; prime brokerage and stock lending services; foreign exchange sales and trading services; commodity derivatives sales and trading; and collateral management services for corporate, government, and institutional investor clients. Further, it provides Internet, mobile, and telephone banking services. The company operates a network of 955 branches and approximately 3,644 automated banking machines in Canada; and approximately 1,800 branches internationally, as well as contact and business support centers. The Bank of Nova Scotia was founded in 1832 and is headquartered in Toronto, Canada.

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