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6 Reasons Why Bank of Hawaii (BOH) Stock is Worth Buying Now
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Bank of Hawaii Corporation’s (BOH - Free Report) rising loan and deposit balances, backed by a recovery in the economy, will strengthen its balance sheet. The company’s substantial capital deployments will enhance shareholder value.
In addition, analysts are bullish on the stock’s earnings growth prospects. Over the past 60 days, the Zacks Consensus Estimate for 2022 and 2023 earnings has moved 2.7% and 7.9% north, respectively. BOH currently carries a Zacks Rank #2 (Buy).
Over the past six months, shares of Bank of Hawaii have rallied 11.1% against the industry’s 0.6% decline.
Image Source: Zacks Investment Research
Mentioned below are few factors that make BOH an attractive investment option now.
Earnings Growth: The company has witnessed earnings per share growth of 3.6% in the past three to five years. While the company’s earnings are projected to decline 13.9% for 2022, earnings are expected to rebound and grow 11.9% in 2023.
Moreover, Bank of Hawaii has an impressive earnings surprise history. The company's earnings have surpassed the Zacks Consensus Estimate in all of the trailing four quarters, the average beat being 20.28%.
Revenue Strength: Bank of Hawaii’s revenues witnessed a compounded annual growth rate (CAGR) of 1% over the last five years (2017-2021). Its increasing share of non-interest-bearing deposits which is a low-cost funding source, is anticipated to boost net interest income (NII) and margin in the upcoming period.
BOH’s 2022 revenues are projected to grow 4.2%, whereas 2023 revenues will likely grow 8.6%.
Solid Balance-Sheet Position: The company’s deposit base recorded a five-year CAGR of 8.1% (2017-2021) while loans witnessed a CAGR of 5.8% during the same time frame. Moreover, low cost and long duration core deposit base along with a healthy variable loan mix position the company well for the higher-rate environment. Strong deposit balances, backed by economic recovery will help the company generate higher loans.
Steady Capital Deployment: In July 2021, the company sequentially hiked its quarterly dividend by 4.5% to 70 cents per share. Further, in the fourth quarter of 2021, the company repurchased 87,500 shares for $7.3 million. As of the fourth-quarter end, $85.7 million of share-buyback authority remained in place. Its strong capital levels and income-generation capacity will enable it to continue repurchase activity. The company will continue to enhance its shareholder value through capital-deployment activities.
Superior Return on Equity: The company’s trailing 12-month return on equity (ROE) highlights its growth potential. Its ROE of 18.06% compares favorably with the industry’s 12.15%, underlining that it is more efficient in using shareholder funds than its peers.
Strong Leverage: Bank of Hawaii’s favorable debt/equity ratio of 0.01 compared with the industry’s 0.14 reflects its relatively strong financial health. Thus, we believe that it will perform better than peers in an unstable business environment.
Image: Bigstock
6 Reasons Why Bank of Hawaii (BOH) Stock is Worth Buying Now
Bank of Hawaii Corporation’s (BOH - Free Report) rising loan and deposit balances, backed by a recovery in the economy, will strengthen its balance sheet. The company’s substantial capital deployments will enhance shareholder value.
In addition, analysts are bullish on the stock’s earnings growth prospects. Over the past 60 days, the Zacks Consensus Estimate for 2022 and 2023 earnings has moved 2.7% and 7.9% north, respectively. BOH currently carries a Zacks Rank #2 (Buy).
Over the past six months, shares of Bank of Hawaii have rallied 11.1% against the industry’s 0.6% decline.
Image Source: Zacks Investment Research
Mentioned below are few factors that make BOH an attractive investment option now.
Earnings Growth: The company has witnessed earnings per share growth of 3.6% in the past three to five years. While the company’s earnings are projected to decline 13.9% for 2022, earnings are expected to rebound and grow 11.9% in 2023.
Moreover, Bank of Hawaii has an impressive earnings surprise history. The company's earnings have surpassed the Zacks Consensus Estimate in all of the trailing four quarters, the average beat being 20.28%.
Revenue Strength: Bank of Hawaii’s revenues witnessed a compounded annual growth rate (CAGR) of 1% over the last five years (2017-2021). Its increasing share of non-interest-bearing deposits which is a low-cost funding source, is anticipated to boost net interest income (NII) and margin in the upcoming period.
BOH’s 2022 revenues are projected to grow 4.2%, whereas 2023 revenues will likely grow 8.6%.
Solid Balance-Sheet Position: The company’s deposit base recorded a five-year CAGR of 8.1% (2017-2021) while loans witnessed a CAGR of 5.8% during the same time frame. Moreover, low cost and long duration core deposit base along with a healthy variable loan mix position the company well for the higher-rate environment. Strong deposit balances, backed by economic recovery will help the company generate higher loans.
Steady Capital Deployment: In July 2021, the company sequentially hiked its quarterly dividend by 4.5% to 70 cents per share. Further, in the fourth quarter of 2021, the company repurchased 87,500 shares for $7.3 million. As of the fourth-quarter end, $85.7 million of share-buyback authority remained in place. Its strong capital levels and income-generation capacity will enable it to continue repurchase activity. The company will continue to enhance its shareholder value through capital-deployment activities.
Superior Return on Equity: The company’s trailing 12-month return on equity (ROE) highlights its growth potential. Its ROE of 18.06% compares favorably with the industry’s 12.15%, underlining that it is more efficient in using shareholder funds than its peers.
Strong Leverage: Bank of Hawaii’s favorable debt/equity ratio of 0.01 compared with the industry’s 0.14 reflects its relatively strong financial health. Thus, we believe that it will perform better than peers in an unstable business environment.
Other Stocks to Consider
A couple of other stocks from the finance space worth a look are Webster Financial (WBS - Free Report) and First Business Financial Services (FBIZ - Free Report) . Webster and FBIZ both carry a Zacks Rank #2, at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
The Zacks Consensus Estimate for Webster’s current-year earnings has been revised 1.4% upward over the past 60 days.
WBS’s shares have risen 25.9% in the past six months.
First Business recorded an upward earnings estimate revision of 9.3% for 2022 over the past 60 days.
The FBIZ stock has jumped 20% in the past year.