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

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Arrow Financial (NASDAQ:AROW – Get Rating) and First Horizon (NYSE:FHN – Get Rating) are both financial companies, but which is the better stock? We’ll 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’s shares are owned by institutional investors. In comparison, 79.6% of First Horizon’s stock is owned by institutional investors. 4.2% of Arrow Financial’s stock is owned by company insiders. By comparison, 1.6% of First Horizon’s stock is 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 the net margins, return on equity, and return on assets of Arrow Financial and First Horizon.

net margins return on equity return on investment
arrow finance 33.05% 13.64% 1.22%
First Horizon 30.72% 13.82% 1.24%

profit and rating

This table compares the gross sales, earnings per share, and valuation of Arrow Financial and First Horizon.

gross receipts price/sales ratio net income earnings per share price-earnings ratio
arrow finance $147.92 million 3.38 $49.86 million $3.05 24.10
First Horizon $3.25 billion 3.58 $999.00 million $1.68 12.93

First Horizon has higher sales and earnings than Arrow Financial. Arrow Financial is trading at a lower price-to-earnings multiple than First Horizon, suggesting it’s the cheaper of the two stocks at the moment.

Volatility & Risk

Arrow Financial has a beta of 0.61, suggesting its stock price is 39% less volatile than the S&P 500. In comparison, First Horizon has a beta of 1.14, suggesting its stock price is 14% more volatile is 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 years to come. Arrow Financial has increased its dividend for 21 straight years. Arrow Financial is clearly the better dividend stock because of its higher yield and longer track record of dividend growth.

Analyst Recommendations

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

sell reviews keep ratings Buy reviews Strong buy recommendations rating score
arrow finance 0 0 0 0 N / A
First Horizon 0 9 0 0 2.00

First Horizon has a consensus price target of $21.29, which suggests a potential downside of 2.00%. Given First Horizon’s higher potential upside potential, analysts clearly believe that First Horizon is cheaper than Arrow Financial.

summary

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

About Arrow Financial (received 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 include commercial lending such as term loans, term loans and lines of credit; and commercial real estate loans to finance real estate purchases, refinancing, commercial property additions and improvements, and commercial construction and land development loans to finance projects. The Company’s lending business also includes consumer installment loans to finance personal expenses, personal lines of credit, overdraft protection and auto loans; and residential real estate loans, fixed home equity loans and consumer home equity lines of credit to finance home improvement, debt consolidation, education and other purposes. In addition, it maintains an indirect lending program; and sells residential real estate lending on the secondary market. In addition, the company provides retirement planning, trust and estate management services for individuals; and administration of pension, profit-sharing and employee benefit plans for companies. It also offers insurance agency services that include group health insurance policies and life insurance, as well as property and casualty insurance products; and investment advisory services for its proprietary mutual funds and owns a real estate investment trust. The Company has operations in the Northeast region of New York State in Warren, Washington, Saratoga, Essex, Clinton, Rensselaer, Albany and Schenectady counties and surrounding areas. It owns 26 bank branches; and leases 12 bank branches and two residential lending offices. Founded in 1851, Arrow Financial Corporation is headquartered in Glens Falls, New York.

Above the first horizon (received rating)

First Horizon logoFirst Horizon Corporation acts as a bank holding company for First Horizon Bank, which provides various financial services. The Company operates through three segments: Regional Banking, Specialty Banking and Corporate. It offers general banking services to consumers, businesses, financial institutions and governments. The Company also subscribes for eligible securities and other fixed income securities eligible for subscription by financial affiliates; sells loans and derivatives; and offers consulting services. In addition, it offers various services such as B. Mortgage Banks; property insurance and credit clearance; mediation; correspondent banks; nationwide check clearing and wire transfer processing; trust, trustee and agency; equipment financing; and investment and financial advisory services. The company also sells mutual fund and personal insurance products; and credit cards. It operates approximately 500 bank branches 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. Founded in 1864, First Horizon Corporation is headquartered in Memphis, Tennessee.



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