First Horizon National (NASDAQ: NCOM) and National Commerce (NASDAQ:NCOM) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings and target prices for First Horizon National and National Commerce, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Horizon National 0 2 8 0 2.80
National Commerce 0 2 0 0 2.00

First Horizon National presently has a consensus target price of $20.68, suggesting a potential upside of 14.63%. National Commerce has a consensus target price of $46.50, suggesting a potential upside of 5.68%. Given First Horizon National’s stronger consensus rating and higher probable upside, analysts clearly believe First Horizon National is more favorable than National Commerce.

Profitability

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

Net Margins Return on Equity Return on Assets
First Horizon National 10.74% 9.64% 1.02%
National Commerce 18.14% 7.97% 1.25%

Dividends

First Horizon National pays an annual dividend of $0.48 per share and has a dividend yield of 2.7%. National Commerce does not pay a dividend. First Horizon National pays out 43.2% of its earnings in the form of a dividend. First Horizon National has increased its dividend for 2 consecutive years.

Institutional and Insider Ownership

85.8% of First Horizon National shares are owned by institutional investors. Comparatively, 45.4% of National Commerce shares are owned by institutional investors. 1.8% of First Horizon National shares are owned by insiders. Comparatively, 14.2% of National Commerce shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

First Horizon National has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, National Commerce has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.

Earnings & Valuation

This table compares First Horizon National and National Commerce’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Horizon National $1.48 billion 3.96 $165.51 million $1.11 16.25
National Commerce $129.83 million 6.99 $20.06 million $1.97 22.34

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

Summary

First Horizon National beats National Commerce on 9 of the 17 factors compared between the two stocks.

About First Horizon National

First Horizon National Corporation operates as the bank holding company for First Tennessee Bank National Association that provides various financial services. It operates through four segments: Regional Banking, Fixed Income, Corporate, and Non-Strategic. The company offers general banking services for consumers, businesses, financial institutions, and governments. It also provides investment, financial planning, trust, asset management, and cash management services. In addition, the company is involved in fixed income securities sales, trading, and strategies for institutional clients; underwriting of bank-eligible securities and other fixed-income securities eligible for underwriting by financial subsidiaries; loan sales; derivative sales; and provision of advisory services. Further, it offers discount and full-service brokerage services; correspondent banking services; transaction processing services comprising nationwide check clearing and remittance processing; trust, fiduciary, and agency services; credit card products; equipment finance; and investment and financial advisory services. Additionally, the company engages in mutual fund and retail insurance sales, as well as provides mortgage banking services. As of February 27, 2018, it operated approximately 350 branches under the First Tennessee Bank and Capital Bank brands across the southeast United States. The company was founded in 1864 and is headquartered in Memphis, Tennessee.

About National Commerce

National Commerce Corporation operates as the bank holding company for National Bank of Commerce that provides various financial services to businesses, business owners, and professionals. The company offers deposit products, including interest and noninterest-bearing demand deposits, money market accounts, interest-bearing transaction accounts, savings and time deposits, checking accounts, and certificates of deposit, as well as negotiable orders of withdrawal accounts. It also provides real estate loans, such as commercial real estate term, residential mortgage, and construction and land development loans, as well as home equity lines of credit secured by residential property; commercial and industrial loans; and consumer loans to purchase automobiles and other consumer durable goods. In addition, the company provides factoring, invoicing, collection, and accounts receivable management services to transportation companies, and automotive parts and service providers; and electronic banking services, including commercial and retail online banking, automated bill payment, mobile banking, and remote deposit capture. The company offers its services through 7 full-service banking offices in Birmingham, Huntsville, Auburn-Opelika, and Baldwin County, Alabama; 21 full-service banking offices in central and northeast Florida, including United Legacy Bank, Reunion Bank of Florida, Patriot Bank, and FirstAtlantic Bank names; and 2 full-service banking offices and a loan production office in Atlanta, Georgia. National Commerce Corporation was founded in 2004 and is headquartered in Birmingham, Alabama.

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