Reviewing First Horizon (NYSE:FHN) and Northeast Bancorp (NASDAQ:NBN)

Northeast Bancorp (NASDAQ:NBN) and First Horizon (NYSE:FHN) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, institutional ownership, analyst recommendations and profitability.

Institutional & Insider Ownership

80.3% of First Horizon shares are held by institutional investors. 14.2% of Northeast Bancorp shares are held by company insiders. Comparatively, 0.9% of First Horizon shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Northeast Bancorp	27.91%	19.35%	2.22%
First Horizon	21.12%	12.06%	1.26%

Volatility & Risk

Northeast Bancorp has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500. Comparatively, First Horizon has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Dividends

Northeast Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. First Horizon pays an annual dividend of $0.68 per share and has a dividend yield of 2.8%. Northeast Bancorp pays out 0.3% of its earnings in the form of a dividend. First Horizon pays out 32.5% 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.

Analyst Ratings

This is a summary of recent ratings and target prices for Northeast Bancorp and First Horizon, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northeast Bancorp	0	1	2	0	2.67
First Horizon	1	11	9	0	2.38

Northeast Bancorp presently has a consensus price target of $143.50, indicating a potential upside of 8.52%. First Horizon has a consensus price target of $27.45, indicating a potential upside of 12.75%. Given First Horizon’s higher probable upside, analysts clearly believe First Horizon is more favorable than Northeast Bancorp.

Valuation and Earnings

This table compares Northeast Bancorp and First Horizon”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northeast Bancorp	$222.55 million	4.88	$107.48 million	$12.72	10.40
First Horizon	$5.00 billion	2.31	$982.00 million	$2.09	11.65

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

About Northeast Bancorp

Northeast Bank provides banking services to individual and corporate customers in Maine. The company's deposit products include demand deposit, NOW, money market, savings, certificate of deposit, and individual retirement accounts, as well as checking accounts. Its loan portfolio comprises residential mortgage loans; multi-family and other commercial real estate loans; commercial and industrial loans, such as term loans, lines of credit and equipment, and receivables financing; consumer loans comprising mobile home and overdraft, and deposit-secured loans; and small business administration loans. In addition, the company offers telephone banking, online banking and bill payment, mobile banking, cash management, and remote deposit capture services, as well as debit and credit card, ATM, electronic transfer, and check services. Further, it provides various services, such as money market, merchant, and payroll and HR. Northeast Bank was founded in 1872 and is headquartered in Portland, Maine.

About First Horizon

First Horizon Corporation operates as the bank holding company for First Horizon Bank that provides various financial services. The company operates through Regional Banking and Specialty Banking segments. It offers general banking services for consumers, businesses, financial institutions, and governments. The company also accepts deposits; provides underwriting services for bank-eligible securities and other fixed-income securities by financial subsidiaries; sells loans and derivatives; financial planning; and offers investment and financial advisory services. In addition, it offers mortgage banking; loan syndications; brokerage services; commercial and business banking for business enterprises, consumer banking, and private client and wealth management services; capital markets, professional commercial real estate, mortgage warehouse and asset-based lending, franchise and equipment finance, tax credit finance, energy and healthcare finance, asset management, and corporate and correspondent banking services. Further, the company provides transaction processing services including check clearing services and remittance processing, credit cards, investment, and sale of mutual fund and retail insurances, as well as trust, fiduciary, and agency services. First Horizon Corporation was founded in 1864 and is headquartered in Memphis, Tennessee.