The state of Hawaii has long been a popular tourist destination for both Americans and international travelers. Despite its ranking as the 41st most populous state in the 2010 U.S. Census, Hawaii sees millions of passengers each year. The state, which had a population of 1.39 million people in 2012, has seen flights and cruise ship arrivals grow in 2013.
Through the month of April, the state of Hawaii had 637,000 visitors by air, which is a 5.8% increase from the prior year. Of that growth, international visitors increased 9.1%, while domestic visitors grew 4.2%. That traffic could also increase with several new countries expanding flights to the Honolulu International Airport within the next 12 months.
Another reason for the increase in tourism could be the newly opened Aulani Disney Resort & Spa. Opened in August 2011, the newest American The Walt Disney Company (NYSE:DIS) resort is still undergoing expansion to get to full capacity. The resort has 359 hotel rooms and 481 Disney Vacation Club Villas. Located only 17 miles from the Honolulu International Airport, the resort is attracting visitors from all over the world.
Here are three large publicly traded Hawaiian companies worth putting in your portfolio to profit from the continued tourism and population growth of the island state.
Invest in a utility and a bank
Hawaiian Electric Industries, Inc. (NYSE:HE) offers the unique investment opportunity of an electric company and a regional bank. I wrote about the diversified businesses of Hawaiian Electric back in February of 2012. The company operates two utility companies, which make up 95% of the state’s electricity, and a regional bank, which ranks in the top five in assets and deposits for the state.
Founded in 1891, Hawaiian Electric Industries, Inc. (NYSE:HE) has provided electricity for every island but Kauai. The company is increasing its clean energy and posted a record 13.9% of its energy from renewable resources in 2012. Electric revenue made up $719.2 million of the $784 million reported in the company’s first quarter.
American Savings Bank opened in 1925 and ranks in the top five for Hawaiian banking assets. In the first quarter, bank deposits grew by $83 million to $4.3 billion. Loan growth also grew 6.9% in the first quarter. Total revenue did decline in fiscal 2012 for the banking sector, but it looks like a rebound is on the way in 2013 with strong loan activity.
Hawaiian Electric Industries, Inc. (NYSE:HE) has paid a dividend for the last 111 years and currently yields close to 5%, offering investors great annual income along with the island’s growth. Shares of Hawaiian Electric Industries, Inc. (NYSE:HE) were down 3.7% in 2012. Look for shares to rebound with increased loan activity and increased electric infrastructure investments.
Invest in banking duopoly
The Bank of Hawaii Corporation (NYSE:BOH) is one of the two largest banks representing the island state. In 2012, Bank of Hawaii and First Hawaiian Bank had a 71% market share in the state. Increasing barriers of entry make it hard for others to enter the state. None of the largest ten national banks have a physical presence on the island.