2. Bank of Hawaii
Bank of Hawaii
(BOH - Get Report)
of Honolulu closed at $45.44 Tuesday, returning 5% year-to-date, following a 2% decline last year. With a quarterly payout of 45 cents, the shares have a dividend yield of 3.96%.
The shares trade for 2.2 times tangible book value, and for 13 times the consensus 2013 EPS estimate of $3.44. The consensus 2012 EPS estimate is $3.58.
For the 12-month period ended June 30, the bank's ROA was 1.22%, and its ROE was a very respectable 17.17%. During the same period, Bank of Hawaii's dividend payout ratio was 49.52%.
The consensus among analysts is for Bank of Hawaii to report third-quarter earnings of 89 cents a share, declining from 90 cents in the second quarter, and 92 cents during the third quarter of 2011.
Sterne Agee analyst Brett Rabatin has a neutral rating on Bank of Hawaii and said in late July after the company reported its second-quarter results that "given low re-investment rate opportunities, investors are likely to remain concerned about revenue pressure for BOH going forward," but also said that an "improved outlook for expense management and more confidence on a potential base level of spread revenue in FY14 leads us to believe BOH is a solid defensive holding given the sustainable cash dividend, share buyback, and likelihood the ROA remains above 1% in the low interest rate environment."
Bank of Hawaii bought back 1.1 million common shares for $50 million. On July 20, the company's board of directors authorized another $75 million in common share buybacks, and was authorized to repurchase $95.8 million in additional shares, as of that date.
Darst said that "the bottom line is the shares likely have less downside than peers if bank stocks trend downward with macroeconomic concerns, but catalysts for the shares to reach the $50 range appear limited."
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