diff --git a/esphome/dashboard/dashboard.py b/esphome/dashboard/dashboard.py
index 1b150e008d..c53c68b3a3 100644
--- a/esphome/dashboard/dashboard.py
+++ b/esphome/dashboard/dashboard.py
@@ -30,6 +30,7 @@ from esphome.helpers import mkdir_p, get_bool_env, run_system_command
 from esphome.storage_json import EsphomeStorageJSON, StorageJSON, \
     esphome_storage_path, ext_storage_path, trash_storage_path
 from esphome.util import shlex_quote, get_serial_ports
+from .util import password_hash
 
 # pylint: disable=unused-import, wrong-import-order
 from typing import Optional  # noqa
@@ -42,7 +43,7 @@ _LOGGER = logging.getLogger(__name__)
 class DashboardSettings:
     def __init__(self):
         self.config_dir = ''
-        self.password_digest = ''
+        self.password_hash = ''
         self.username = ''
         self.using_password = False
         self.on_hassio = False
@@ -55,7 +56,7 @@ class DashboardSettings:
             self.username = args.username or os.getenv('USERNAME', '')
             self.using_password = bool(password)
         if self.using_password:
-            self.password_digest = hmac.new(password.encode()).digest()
+            self.password_hash = password_hash(password)
         self.config_dir = args.configuration[0]
 
     @property
@@ -82,8 +83,11 @@ class DashboardSettings:
         if username != self.username:
             return False
 
-        password = hmac.new(password.encode()).digest()
-        return username == self.username and hmac.compare_digest(self.password_digest, password)
+        # Compare password in constant running time (to prevent timing attacks)
+        return hmac.compare_digest(
+            self.password_hash,
+            password_hash(password)
+        )
 
     def rel_path(self, *args):
         return os.path.join(self.config_dir, *args)
@@ -446,7 +450,7 @@ class MainRequestHandler(BaseHandler):
         entries = _list_dashboard_entries()
 
         self.render("templates/index.html", entries=entries, begin=begin,
-                    **template_args())
+                    **template_args(), login_enabled=settings.using_auth)
 
 
 def _ping_func(filename, address):
diff --git a/esphome/dashboard/templates/index.html b/esphome/dashboard/templates/index.html
index 1e546b037f..fa742fd2c6 100644
--- a/esphome/dashboard/templates/index.html
+++ b/esphome/dashboard/templates/index.html
@@ -52,7 +52,9 @@
         <li><a data-action="update-all" data-filename="{{ escape(config_dir) }}">Update All</a></li>
         <li><a data-action="edit" data-filename="secrets.yaml">Secrets Editor</a></li>
         <li class="divider"></li>
-        <li><a href="{{ relative_url }}logout">Logout</a></li>
+        {% if login_enabled %}
+          <li><a href="{{ relative_url }}logout">Logout</a></li>
+        {% end %}
       </ul>
     </nav>
   </div>
diff --git a/esphome/dashboard/util.py b/esphome/dashboard/util.py
new file mode 100644
index 0000000000..3e3864aa17
--- /dev/null
+++ b/esphome/dashboard/util.py
@@ -0,0 +1,9 @@
+import hashlib
+
+
+def password_hash(password: str) -> bytes:
+    """Create a hash of a password to transform it to a fixed-length digest.
+
+    Note this is not meant for secure storage, but for securely comparing passwords.
+    """
+    return hashlib.sha256(password.encode()).digest()