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FHN vs. FBNC: Which Stock Is the Better Value Option?

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Investors interested in Banks - Southeast stocks are likely familiar with First Horizon National (FHN - Free Report) and First Bancorp (FBNC - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Both First Horizon National and First Bancorp have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

FHN currently has a forward P/E ratio of 9.74, while FBNC has a forward P/E of 11.13. We also note that FHN has a PEG ratio of 1.97. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. FBNC currently has a PEG ratio of 2.37.

Another notable valuation metric for FHN is its P/B ratio of 1. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, FBNC has a P/B of 1.28.

Based on these metrics and many more, FHN holds a Value grade of A, while FBNC has a Value grade of C.

Both FHN and FBNC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that FHN is the superior value option right now.


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