The Best Stock in Hawaii: Bank of Hawaii Corp.
We analyzed publicly traded companies based in the Aloha State to identify the best stock in Hawaii to buy now.
A word of caution: Since we selected a single stock from each state (plus one from D.C), and choices in some states are sparse, a few of our picks are best suited to investors comfortable with a higher degree of risk. This is not necessarily one of our 51 favorite stocks in the entire U.S., in other words.
Bank of Hawaii by the Numbers
- Headquarters: Honolulu
- Share price: $80.70
- Market value: $3.4 billion
- Price-earnings ratio: 18
(Prices and data are as of June 22, 2017)
This year is looking warm and breezy for Bank of Hawaii, says Value Line analyst Kenneth DeFranco Jr. Rising interest rates and increased loan demand are boosting interest income for the bank. And a healing Hawaiian economy marked by elevated tourism, growth in new construction and strengthening median home prices bodes well for the bank, he says. He expects earnings per share to reach $4.70 by the end of 2018, a 5% annual growth rate from last year’s mark.
Bank of Hawaii is one of only two publicly traded banks in the state, and the islands' isolation, coupled with Hawaiians’ loyalty to names they trust, means that the bank faces little competition from large, mainland banks, says Craig Stone, who manages Virtus KAR Small-Cap Value Fund. Bank of Hawaii is a top-ten holding in the fund. Stone appreciates the company’s consistent (if not stratospheric) earnings growth rate, which helps the stock hold up well when the market tumbles, he says. During the 2007–09 bear market, Bank of Hawaii slid a cumulative 49%, compared with a 55% loss for the S&P 500 and 69% for the average U.S. regional bank. Over the past 15 years, shares in Bank of Hawaii returned an annualized 9.1%, outpacing its peers by four percentage points and the broad market by 0.7-point. After a 4% dividend hike in March, the stock currently yields 2.5%.