When Bank of Hawaii Corporation (NYSE:BOH) released its most recent earnings update (30 September 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Bank of Hawaii’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not BOH actually performed well. Below is a quick commentary on how I see BOH has performed. Check out our latest analysis for Bank of Hawaii
Did BOH’s recent EPS Growth beat the long-term trend and the industry?
I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This allows me to assess many different companies on a more comparable basis, using the latest information. For Bank of Hawaii, the latest earnings is $185M, which compared to last year’s figure, has increased by a relatively unexciting 2.46%. Since these values are somewhat myopic, I have calculated an annualized five-year value for BOH’s earnings, which stands at $166M. This shows that, on average, Bank of Hawaii has been able to gradually grow its earnings over the past couple of years as well.
What’s enabled this growth? Let’s see whether it is solely a result of an industry uplift, or if Bank of Hawaii has seen some company-specific growth. In the past few years, Bank of Hawaii increased its bottom line faster than revenue by effectively controlling its costs. This brought about a margin expansion and profitability over time. Scanning growth from a sector-level, the US banks industry has been growing its average earnings by double-digit 12.54% over the prior twelve months, and a more muted 9.71% over the past five. This suggests that whatever uplift the industry is benefiting from, Bank of Hawaii has not been able to reap as much as its average peer.
What does this mean?
Bank of Hawaii’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Bank of Hawaii to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for BOH’s future growth? Take a look at our free research report of analyst consensus for BOH’s outlook.
2. Financial Health: Is BOH’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.