Our analysis is based on comparing Bank of Hawaii Corp. with the following peers – Central Pacific Financial Corp., Bank of Marin Bancorp, Cathay General Bancorp, Cullen/Frost Bankers, Inc., CoBiz Financial Inc., Hancock Holding Company, Huntington Bancshares Incorporated, East West Bancorp, Inc., M&T Bank Corporation and Columbia Banking System, Inc. (CPF-US, BMRC-US, CATY-US, CFR-US, COBZ-US, HBHC-US, HBAN-US, EWBC-US, MTB-US and COLB-US).
Bank of Hawaii Corp.’s dividend yield is 2.45 percent and its dividend payout is 45.69 percent. This compares to a peer median dividend yield of 2.22 percent and a payout level of 40 percent. This type of dividend performance might make it a good stock for dividend investors. However, the company’s average dividend quality score of 42 out of a possible score of 100, points to some weakness in the sustainability of its robust payout ratio, and makes its less attractive for dividend investors seeking current income.
Dividend Quality Overview
- Over the last twelve months (prior to June 30, 2017), BOH-US paid a medium quality dividend, which represents a yield of 2.40% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 4 were medium quality and 1 was low quality.
- The ending cash balance, with a dividend coverage of 1.53x, provides a moderate cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to June 30, 2017), BOH-US paid a medium quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 2.91x), investing cash flow (coverage of -12.62x), issuance cash flow (coverage of 12.15x) and twelve-month prior cash (coverage of 1.60x), for a total dividend coverage of 2.53x.
BOH-US’s issuance cash flow includes outflows from net debt repayment (coverage of -1.06x) and net share buybacks (coverage of -0.40x). Thus, the total coverage including share buybacks is 2.93x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm’s net cash inflow from issuance was required (in addition to operating and investment cash) to pay the dividend, which suggests a medium dividend quality.
|Dividend Yield (%)||4.14||3.06||3.07||2.88||2.15||2.45|
|Dividend Payout (%)||49.05||53.25||48.78||48.65||44.68||45.69|
A complete list of metrics and analysis is available on the company page.
Bank of Hawaii Corp. is a bank holding company, which engages in the provision of financial services. It operates through the following segments: Retail Banking; Commercial Banking; Investment Services; and Treasury and Other. It offers saving and checking accounts, loans, mortgages, credit and debit cards, online and mobile banking, wealth management, and investment products. The company was founded on August 12, 1971 and is headquartered in Honolulu, HI.
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