Financial Review: First Financial Bancorp. (NASDAQ:FFBC) and First Horizon (NYSE:FHN)

First Horizon (NYSE:FHN) and First Financial Bancorp. (NASDAQ:FFBC) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their earnings, valuation, risk, institutional ownership, dividends, profitability and analyst recommendations.

Dividends

First Horizon pays an annual dividend of $0.60 per share and has a dividend yield of 3.8%. First Financial Bancorp. pays an annual dividend of $0.92 per share and has a dividend yield of 4.0%. First Horizon pays out 42.0% of its earnings in the form of a dividend. First Financial Bancorp. pays out 37.1% 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. First Financial Bancorp. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Horizon	16.07%	8.96%	0.92%
First Financial Bancorp.	20.74%	11.22%	1.43%

Analyst Ratings

This is a summary of recent ratings and recommmendations for First Horizon and First Financial Bancorp., as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Horizon	0	4	9	1	2.79
First Financial Bancorp.	0	2	1	0	2.33

First Horizon currently has a consensus target price of $16.15, indicating a potential upside of 3.09%. First Financial Bancorp. has a consensus target price of $24.67, indicating a potential upside of 6.87%. Given First Financial Bancorp.’s higher probable upside, analysts clearly believe First Financial Bancorp. is more favorable than First Horizon.

Institutional & Insider Ownership

80.3% of First Horizon shares are owned by institutional investors. Comparatively, 77.2% of First Financial Bancorp. shares are owned by institutional investors. 0.9% of First Horizon shares are owned by insiders. Comparatively, 2.0% of First Financial Bancorp. shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

First Horizon has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, First Financial Bancorp. has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500.

Earnings & Valuation

This table compares First Horizon and First Financial Bancorp.’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Horizon	$5.03 billion	1.73	$897.00 million	$1.43	10.96
First Financial Bancorp.	$1.12 billion	1.98	$255.86 million	$2.48	9.31

First Horizon has higher revenue and earnings than First Financial Bancorp.. First Financial 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.

Summary

First Financial Bancorp. beats First Horizon on 10 of the 17 factors compared between the two stocks.

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.

About First Financial Bancorp.

First Financial Bancorp. operates as the bank holding company for First Financial Bank that provides commercial banking and related services to individuals and businesses in Ohio, Indiana, Kentucky, and Illinois. The company offers checking, savings, and money-market accounts; and accepts various deposit products, such as interest-bearing and non-interest-bearing accounts, time deposits, and cash management services for commercial customers. It also provides real estate loans secured by residential property, such as one to four family residential housing units or commercial property comprising owner-occupied and/or investor income producing real estate consisting of apartments, shopping centers, and office buildings; commercial and industrial loans for various purposes, including inventory, receivables, and equipment, as well as equipment and leasehold improvement financing for franchisees; consumer loans comprising new and used vehicle loans, second mortgages on residential real estate, and unsecured loans; and home equity lines of credit. In addition, the company offers commercial financing to the insurance industry, registered investment advisors, certified public accountants, indirect auto finance companies, and restaurant franchisees. Further, it provides a range of trust and wealth management services; lease and equipment financing services; and currency payments, foreign exchange hedging, and other advisory products. First Financial Bancorp. was founded in 1863 and is headquartered in Cincinnati, Ohio.