Back to top

Image: Bigstock

FHN vs. TBK: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors looking for stocks in the Banks - Southeast sector might want to consider either First Horizon National (FHN - Free Report) or Triumph Bancorp . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, First Horizon National has a Zacks Rank of #2 (Buy), while Triumph Bancorp has a Zacks Rank of #5 (Strong Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that FHN has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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 8.47, while TBK has a forward P/E of 15.86. We also note that FHN has a PEG ratio of 1.04. 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. TBK currently has a PEG ratio of 1.32.

Another notable valuation metric for FHN is its P/B ratio of 0.87. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, TBK has a P/B of 1.45.

These metrics, and several others, help FHN earn a Value grade of B, while TBK has been given a Value grade of D.

FHN is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that FHN is likely the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


First Horizon Corporation (FHN) - free report >>

Published in