Bank of Hawaii (NASDAQ: SMMF) and Summit Financial Group (NASDAQ:SMMF) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitability.

Analyst Ratings

This is a breakdown of recent recommendations for Bank of Hawaii and Summit Financial Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank of Hawaii 1 4 1 0 2.00
Summit Financial Group 0 1 0 0 2.00

Bank of Hawaii presently has a consensus target price of $90.50, indicating a potential upside of 10.74%. Summit Financial Group has a consensus target price of $26.00, indicating a potential upside of 6.78%. Given Bank of Hawaii’s higher possible upside, equities analysts plainly believe Bank of Hawaii is more favorable than Summit Financial Group.

Profitability

This table compares Bank of Hawaii and Summit Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank of Hawaii 28.32% 16.26% 1.17%
Summit Financial Group 20.37% 12.48% 1.20%

Dividends

Bank of Hawaii pays an annual dividend of $2.40 per share and has a dividend yield of 2.9%. Summit Financial Group pays an annual dividend of $0.52 per share and has a dividend yield of 2.1%. Bank of Hawaii pays out 54.4% of its earnings in the form of a dividend. Summit Financial Group pays out 27.5% 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 Hawaii has increased its dividend for 2 consecutive years. Bank of Hawaii is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Bank of Hawaii has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500. Comparatively, Summit Financial Group has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500.

Valuation and Earnings

This table compares Bank of Hawaii and Summit 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
Bank of Hawaii $689.21 million 4.98 $184.67 million $4.41 18.53
Summit Financial Group $98.95 million 3.07 $11.91 million $1.89 12.88

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

Institutional & Insider Ownership

75.3% of Bank of Hawaii shares are held by institutional investors. Comparatively, 26.1% of Summit Financial Group shares are held by institutional investors. 2.0% of Bank of Hawaii shares are held by insiders. Comparatively, 22.8% of Summit Financial Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Bank of Hawaii beats Summit Financial Group on 13 of the 16 factors compared between the two stocks.

Bank of Hawaii Company Profile

Bank of Hawaii Corporation operates as the bank holding company for Bank of Hawaii that provides financial products and services in Hawaii, Guam, and other Pacific Islands. It operates through four segments: Retail Banking, Commercial Banking, Investment Services and Private Banking, and Treasury and Other. The Retail Banking segment offers financial products and services to consumers and small businesses. It offers checking, savings, and time deposit accounts; loan and lease products, including residential mortgage loans, home equity lines of credit, automobile loans and leases, personal lines of credit, installment loans, small business loans and leases, and credit cards; and retail insurance products. This segment provides its products and services through 69 branch locations and 387 ATMs in Hawaii and the Pacific Islands, as well as through a customer service center, and online and mobile banking. The Commercial Banking segment's product lines comprise corporate banking, commercial real estate loans, commercial lease financing, auto dealer financing, and deposit products. It offers commercial lending and deposit products to middle-market and large companies, and government entities; and commercial real estate mortgages to investors, developers, and builders. This segment also provides international banking and merchant services. The Investment Services and Private Banking segment offers private and international client banking, trust, investment management, and institutional investment advisory services for individuals and families, high-net-worth individuals, corporations, government entities, and foundations. This segment also provides brokerage offering equities, mutual funds, life insurance, and annuity products. The Treasury and Other segment offers corporate asset and liability management services, such as interest rate risk management and foreign exchange services. Bank of Hawaii Corporation was founded in 1897 and is headquartered in Honolulu, Hawaii.

Summit Financial Group Company Profile

Summit Financial Group, Inc. operates as a financial holding company for Summit Community Bank, Inc. that provides community banking and other financial services to individuals and businesses primarily in the Eastern Panhandle and South Central regions of West Virginia and the Shenandoah Valley, and Southwestern regions of Virginia. The company operates through three segments: Community Banking, Trust and Wealth Management, and Insurance. Its community banking services include demand, savings, and time deposits; commercial, commercial real estate, construction and land development, residential real estate, and consumer loans; and mortgage warehouse lines of credit, as well as trust and wealth management, and cash management services. The company also offers insurance brokerage services, such as corporate and personal property and casualty insurance products, as well as group health and life insurance products, and consulting services. It operates thirty banking locations. Summit Financial Group, Inc. was founded in 1987 and is headquartered in Moorefield, West Virginia.

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