| Name of Company | Country of Origin/ Exchange Traded | Sector | Stock Price | ||||||||
| FIRST HORIZON NATIONAL CORP | US/ NYSE |
Financial Services – Banks – Banks – Regional – US | USD17.94 | ||||||||
| @ 11 Jul 2018 | |||||||||||
| COMPANY PROFILE | First Horizon National Corp is engaged in providing financial products and services, including traditional lending and deposit taking, to consumer and commercial customers.
First Horizon National Corp is the parent company of First Tennessee Bank, a prominent regional bank with about 200 branches around Tennessee. The regional bank is responsible for roughly 65% of its revenue, while capital markets makes a 25% contribution. The remainder is split between the firm’s non-strategic (wind-down) and corporate operations. First Horizon concentrates on offering a variety of banking products mainly in its home state, where it has the second- largest deposit franchise with a 13% of deposit market share. |
||||||||||
| Stock Code | FHN | ||||||||||
| Stock Valuation and Dividend Analysis Below | |||||||||||
| For stocks that has a history of paying meaningful dividends, the stock price is often dependent on how much dividend the company pays. | |||||||||||
| At the price of USD17.94 as at 11 Jul 2018, First Horizon National Corp is trading at a Dividend Yield of 2.7%. This is a 50.0% premium to its historical average Dividend Yield of 1.8%. (Note: The lower/higher the dividend yield, the more expensive/cheaper the stock is.) | |||||||||||
| Is the stock overvalued? One should not just look at one indicator to determine the fair value of a stock. | |||||||||||
| ProThinker believes in using a combination of valuation methods to decide whether a stock is over or undervalued? The five ratios we use are Price to Earnings, Price to Sales, Price to Cash Flow, Price to Book and Dividend Yield. We use multiple methods to value a stock because each has its benefits as well as shortcomings. Price to Earnings and Price to Cash Flow Ratios relate stock price to profitability but are meaningless when the comany has negative earnings or cash flows. Price to Sales Ratio is more stable because sales are never negative. However, this does not tell us whether the company is able to sell profitably. Price to Book Ratio gives us an indication as to how much we are paying for the company’s assets but it is not directly related to the company’s profitability. Dividend Yield cannot be used for companies that are paying little to no dividends. | |||||||||||
| While it is important to value stocks based on multiple valuation methods, this often leads to differing views on valuation. One indicator may suggest that a stock is overvalued while another suggest that it is undervalued. This does not help an investor who needs to make a definite decision whether to buy, hold or sell the stock. That is why we advocate the use of a Composite Valuation Indicator, which is derived from the best combination of the five indicators above. A Composite Valuation Indicator will give you ONE conclusion on whether a stock is under or over valued. | |||||||||||
| To find out more about our valuation methodology, click here. | |||||||||||
| The company usually pays less dividends than its free cash flow, which is good. | |||||||||||
