Arrow Financial (NASDAQ: AROW) versus First Horizon (NYSE: FHN) Critical Review


Arrow Financial (NASDAQ: AROW – Get Rating) and First Horizon (NYSE: FHN – Get Rating) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Institutional and Insider Ownership

43.8% of Arrow Financial shares are owned by institutional investors. Comparatively, 79.6% of First Horizon shares are owned by institutional investors. 4.2% of Arrow Financial shares are owned by company insiders. Comparatively, 1.6% of First Horizon shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Arrow Financial and First Horizon’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arrow Financial 33.05% 13.64% 1.22%
First Horizon 30.72% 13.82% 1.24%

Earnings and Valuation

This table compares Arrow Financial and First Horizon’s gross revenue, earnings per share and valuation.

Gross Revenue Price / Sales Ratio Net Income Earnings Per Share Price / Earnings Ratio
Arrow Financial $ 147.92 million 3.38 $ 49.86 million $ 3.05 10.24
First Horizon $ 3.25 billion 3.58 $ 999.00 million $ 1.68 12.93

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

Volatility & Risk

Arrow Financial has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500. Comparatively, First Horizon has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500.

Dividends

Arrow Financial pays an annual dividend of $ 1.08 per share and has a dividend yield of 3.5%. First Horizon pays an annual dividend of $ 0.60 per share and has a dividend yield of 2.8%. Arrow Financial pays out 35.5% of its earnings in the form of a dividend. First Horizon pays out 35.7% 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. Arrow Financial has raised its dividend for 21 consecutive years. Arrow Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommendations for Arrow Financial and First Horizon, as provided by MarketBeat.com.

Sell ​​Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arrow Financial 0 0 0 0 N / A
First Horizon 0 9 0 0 2.00

First Horizon has a consensus price target of $ 21.29, suggesting a potential downside of 2.00%. Given First Horizon’s higher possible upside, analysts plainly believe First Horizon is more favorable than Arrow Financial.

Summary

First Horizon beats Arrow Financial on 9 of the 15 factors compared between the two stocks.

About Arrow Financial (Get Rating)

Arrow Financial Corporation, a bank holding company, provides commercial and consumer banking, and financial products and services. The company’s deposit products include demand deposits, interest-bearing checking accounts, savings deposits, time deposits, and other time deposits. Its lending activities comprise commercial loans, such as term loans, time notes, and lines of credit; and commercial real estate loans to finance real estate purchases, refinancing, expansions, and improvements to commercial properties, as well as commercial construction and land development loans to finance projects. The company’s lending activities also include consumer installment loans to finance personal expenditures, personal lines of credit, overdraft protection, and automobile loans; and residential real estate loans, fixed home equity loans, and home equity lines of credit for consumers to finance home improvements, debt consolidation, education, and other uses. In addition, it maintains an indirect lending program; and sells residential real estate loan originations into the secondary market. Further, the company provides retirement planning, trust, and estate administration services for individuals; and pension, profit-sharing, and employee benefit plan administration services for corporations. Additionally, it offers insurance agency services comprising group health care policies and life insurance, and property and casualty insurance products; and investment advisory services to its proprietary mutual funds, as well as holds a real estate investment trust. The company operates in the northeastern region of New York State in Warren, Washington, Saratoga, Essex, Clinton, Rensselaer, Albany, and Schenectady counties, as well as surrounding areas. It owns 26 branch banking offices; and leases 12 branch banking offices, as well as two residential loan origination offices. Arrow Financial Corporation was founded in 1851 and is headquartered in Glens Falls, New York.

About First Horizon (Get Rating)

First Horizon Corporation operates as the bank holding company for First Horizon Bank that provides various financial services. The company operates through three segments: Regional Banking, Specialty Banking, and Corporate. It offers general banking services for consumers, businesses, financial institutions, and governments. The company also underwrites bank-eligible securities and other fixed-income securities eligible for underwriting by financial subsidiaries; sells loans and derivatives; and offers advisory services. In addition, it offers various services, such as mortgage banking; title insurance and loan-closing; brokerage; correspondent banking; nationwide check clearing and remittance processing; trust, fiduciary, and agency; equipment finance; and investment and financial advisory services. Further, the company sells mutual fund and retail insurance products; and credit cards. It operates approximately 500 banking offices in 22 states under the First Horizon Bank brand; and 400 banking centers in 12 states under the FHN Financial brand in the United States. The company was formerly known as First Horizon National Corporation and changed its name to First Horizon Corporation in November 2020. First Horizon Corporation was founded in 1864 and is headquartered in Memphis, Tennessee.



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