Itau Unibanco (NYSE: ITUB) and First Horizon National (NYSE:FHN) are both mid-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, dividends, earnings, valuation and risk.
Volatility and Risk
Itau Unibanco has a beta of 1.58, meaning that its share price is 58% more volatile than the S&P 500. Comparatively, First Horizon National has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500.
4.7% of Itau Unibanco shares are held by institutional investors. Comparatively, 89.0% of First Horizon National shares are held by institutional investors. 2.1% of First Horizon National shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Itau Unibanco pays an annual dividend of $0.52 per share and has a dividend yield of 4.0%. First Horizon National pays an annual dividend of $0.36 per share and has a dividend yield of 1.8%. Itau Unibanco pays out 45.2% of its earnings in the form of a dividend. First Horizon National pays out 32.1% 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.
Valuation and Earnings
This table compares Itau Unibanco and First Horizon National’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Itau Unibanco||$46.19 billion||1.82||$6.67 billion||$1.15||11.22|
|First Horizon National||$1.37 billion||3.45||$227.04 million||$1.12||18.01|
Itau Unibanco has higher revenue and earnings than First Horizon National. Itau Unibanco is trading at a lower price-to-earnings ratio than First Horizon National, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current recommendations and price targets for Itau Unibanco and First Horizon National, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|First Horizon National||0||8||3||1||2.42|
Itau Unibanco currently has a consensus price target of $14.25, indicating a potential upside of 10.47%. First Horizon National has a consensus price target of $21.14, indicating a potential upside of 4.82%. Given Itau Unibanco’s higher possible upside, equities analysts plainly believe Itau Unibanco is more favorable than First Horizon National.
This table compares Itau Unibanco and First Horizon National’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|First Horizon National||19.36%||9.40%||0.86%|
First Horizon National beats Itau Unibanco on 9 of the 17 factors compared between the two stocks.
Itau Unibanco Company Profile
Itau Unibanco Holding S.A. is a holding company. The Company provides a range of financial products and services to individual and corporate clients in Brazil and abroad. The Company operates through three segments: Retail Banking, Wholesale Banking, and Activities with the Market + Corporation. The Retail Banking segment offers banking products and services to a diversified client base of account holders and non-account holders, individuals and companies. The Wholesale Banking segment offers products and services to middle-market companies, high-net worth clients (Private Banking) and institutional clients. The Company’s Activities with the Market + Corporation segment mainly manages the financial results associated with capital surplus, subordinated debt, and net debt of tax credits and debits. The Company provides banking activities, through its commercial, investment, real estate loan, finance and investment credit, and lease portfolios, including foreign exchange operations.
First Horizon National Company Profile
First Horizon National Corporation (FHN) is a bank holding company. The Company provides financial services through its subsidiary, First Tennessee Bank National Association (the Bank). The Company has four segments: regional banking, fixed income, corporate and non-strategic. The Company’s regional banking segment offers financial products and services, including traditional lending and deposit taking, to retail and commercial customers in Tennessee and other selected markets. The regional banking segment provides investments and financial planning. The Company’s fixed income segment consists of fixed income securities sales, trading, and strategies for institutional clients in the United States and abroad. The Company’s corporate segment consists of funds management, tax credit investment activities and gains on the extinguishment of debt, among others. The non-strategic segment offers wind-down national consumer lending activities and mortgage banking elements.
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