Bank of Hawaii Shareholders (NYSE.BOH) are currently in the red if their investments were made three years ago

Stock picking can be a way for investors to earn higher returns than the market. Stock picking is risky because you are less likely to get a return than the market. This has been true for a longer time. Bank of Hawaii Corporation (NYSE:BOH(Shareholders): The share price has fallen 17% over the past three years, well below the 22% market return.

Given that shareholders are falling over the long-term, let’s look at the underlying fundamentals and see if they have been consistent with returns.

View our latest analysis for Bank of Hawaii

Although markets can be a powerful pricing mechanism for companies, share prices reflect investor sentiments and not just business performance. Comparing earnings per share (EPS), and price changes over time can give us a sense of how investor attitudes have changed.

Bank of Hawaii saw its earnings per share (EPS), improve by 0.4% over the three years of poor share price growth. Given the share price reaction one might think that EPS may not be a reliable indicator for the business performance over the period, perhaps due to a one-off gain or loss. Or, it could be that growth expectations were unrealistic in the past.

It is reasonable to believe that the market was once too bullish on the stock. However, expectations have since slowed. Other metrics may be more helpful in explaining the price swing.

The revenue has actually increased 4.6% over the past three years so the share price decline doesn’t seem dependent on revenue. Although this analysis is purely for illustrative purposes, it may be worthwhile to research Bank of Hawaii, as stocks can fall in unfair ways. This could be an opportunity.

The graphic below shows how earnings have changed over the years. You can see exact values by clicking the image.

This chart shows how the balance sheet of the company has changed over time. Free interactive graphic.

What about Dividends?

It is important that you consider both the total shareholder return and the share price return for any stock. TSR is a return calculation that includes cash dividends (assuming any dividend received was reinvested), and any discounted capital raises or spin-offs. Companies that pay generous dividends often have a higher TSR than their share price return. The Bank of Hawaii’s TSR for the past 3 years was -7.7%. This is higher than the share price returns mentioned above. It’s not hard to guess that the divergence is due in large part to the dividend payments.

A Different Perspective

Although it is never pleasant to lose money, Bank of Hawaii shareholders can feel better knowing that their trailing twelve-month loss of 7.3%, which includes dividends, wasn’t as severe as the market loss of 20%. Long-term investors won’t be as upset because they would have made 1.1% every year for five years. Although it could be that the business has some short term issues, shareholders need to keep an eye on the basics. Keep this in mind and you might take a look at Bank of Hawaii’s dividend history. This Free interactive graph It is a good place to start.

Naturally Bank of Hawaii might not be the best stock for you to buy. This is why you might want to see it. Free collection of growth stocks.

Please note that the market returns in this article are the market weighted average returns for stocks currently trading on US exchanges.

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This article by Simply Wall St has a general nature. We only provide commentary on historical data and analyst projections. Our articles are not meant to be considered financial advice. This analysis does not represent a recommendation to purchase or sell any stock and it does not consider your financial goals or financial situation. Our goal is to provide you with long-term, focused analysis based on fundamental data. Please note that our analysis might not include the most recent announcements from price-sensitive companies or qualitative material. Simply Wall St does not hold any position in the stocks mentioned.

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