Comparing First Horizon (NYSE:FHN) & Valley National Bancorp (NASDAQ:VLY)

First Horizon (NYSE:FHN) and Valley National Bancorp (NASDAQ:VLY) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, risk and profitability.

Risk and Volatility

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First Horizon has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500. Comparatively, Valley National Bancorp has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500.

Valuation and Earnings

This table compares First Horizon and Valley National Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Horizon $3.39 billion 2.59 $845.00 million $1.22 13.08
Valley National Bancorp $1.57 billion 3.43 $390.61 million $0.96 13.78

First Horizon has higher revenue and earnings than Valley National Bancorp. First Horizon is trading at a lower price-to-earnings ratio than Valley National Bancorp, indicating that it is currently the more affordable of the two stocks.

Dividends

First Horizon pays an annual dividend of $0.60 per share and has a dividend yield of 3.8%. Valley National Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 3.3%. First Horizon pays out 49.2% of its earnings in the form of a dividend. Valley National Bancorp pays out 45.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. First Horizon has raised its dividend for 6 consecutive years and Valley National Bancorp has raised its dividend for 1 consecutive years. First Horizon is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

80.1% of First Horizon shares are held by institutional investors. Comparatively, 56.4% of Valley National Bancorp shares are held by institutional investors. 1.6% of First Horizon shares are held by company insiders. Comparatively, 2.2% of Valley National Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for First Horizon and Valley National Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Horizon 0 1 3 0 2.75
Valley National Bancorp 0 3 2 0 2.40

First Horizon presently has a consensus price target of $17.88, suggesting a potential upside of 12.00%. Valley National Bancorp has a consensus price target of $11.15, suggesting a potential downside of 15.72%. Given First Horizon’s stronger consensus rating and higher probable upside, equities research analysts plainly believe First Horizon is more favorable than Valley National Bancorp.

Profitability

This table compares First Horizon and Valley National Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Horizon 33.31% 13.95% 1.28%
Valley National Bancorp 29.44% 10.40% 1.12%

Summary

First Horizon beats Valley National Bancorp on 13 of the 17 factors compared between the two stocks.

First Horizon Company Profile

First Horizon Corp. (Tennessee) operates as a financial holding company, which engages in the provision of checking accounts, savings products, mortgage banking, lending, and financing to individuals and businesses. It operates the business through four segments: Regional Banking, Specialty Banking, and Corporate. The Regional Banking segment offers financial products and services, including traditional lending and deposit taking, to retail and commercial customers. The Specialty Banking segment consists of lines of business that deliver product offerings and services with specialized industry knowledge. The Corporate segment focuses on corporate support functions such as risk management, audit, accounting, finance, executive office, and corporate communications. The company was founded by Frank S. Davis in 1864 and is headquartered in Memphis, TN.

Valley National Bancorp Company Profile

Valley National Bancorp is a bank holding company, which engages in the provision of retail and commercial banking services. It operates through the following segments: Consumer Lending; Commercial Lending; Investment Management; and Corporate and Other Adjustments. The Consumer Lending segment consists of residential mortgage loans, automobile loans and home equity loans, as well as wealth management and insurance services. The Commercial Lending segment includes the floating rate and adjustable rate commercial and industrial loans as well as fixed rate owner occupied and commercial real estate loans. The Investment Management segment refers to investments in various types of securities and interest-bearing deposits with other banks. The Corporate and Other Adjustments segment represents the income and expense items not directly attributable to a specific segment. The company was founded on November 12, 1982 and is headquartered in New York, NY.