Reviewing First Horizon (NYSE:FHN) and Carter Bankshares (NASDAQ:CARE)

Carter Bankshares (NASDAQ:CARE) and First Horizon (NYSE:FHN) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Earnings and Valuation

This table compares Carter Bankshares and First Horizon”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carter Bankshares	$214.28 million	3.14	$31.00 million	$5.81	5.22
First Horizon	$3.42 billion	3.16	$982.00 million	$2.09	10.93

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

Institutional and Insider Ownership

41.5% of Carter Bankshares shares are held by institutional investors. Comparatively, 80.3% of First Horizon shares are held by institutional investors. 2.4% of Carter Bankshares shares are held by insiders. Comparatively, 0.9% of First Horizon shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for Carter Bankshares and First Horizon, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carter Bankshares	0	4	1	0	2.20
First Horizon	1	12	8	0	2.33

Carter Bankshares currently has a consensus target price of $30.75, suggesting a potential upside of 1.45%. First Horizon has a consensus target price of $27.07, suggesting a potential upside of 18.47%. Given First Horizon’s stronger consensus rating and higher probable upside, analysts clearly believe First Horizon is more favorable than Carter Bankshares.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Carter Bankshares	36.79%	7.46%	0.73%
First Horizon	21.12%	12.06%	1.26%

Risk & Volatility

Carter Bankshares has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, First Horizon has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500.

Dividends

Carter Bankshares pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. First Horizon pays an annual dividend of $0.68 per share and has a dividend yield of 3.0%. Carter Bankshares pays out 6.9% 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.

Summary

First Horizon beats Carter Bankshares on 12 of the 16 factors compared between the two stocks.

About Carter Bankshares

Carter Bankshares, Inc. operates as the bank holding company for Carter Bank & Trust that provides various banking products and services in the United States. It accepts various deposit products, including checking, savings, retirement, and money market accounts, as well as certificates of deposits. The company also offers commercial loans comprising secured and unsecured loans; consumer loans, such as secured and unsecured loans for financing automobiles, home improvements, education, overdraft protection, and personal investments, as well as residential mortgages; real estate construction, acquisition, commercial, and industrial loans; home equity lines of credit; and credit cards, as well as originates and holds fixed and variable rate mortgage loans. In addition, it provides other banking services that include safe deposit boxes, direct deposit of payroll, and social security checks; online banking products, including online and mobile banking, online account opening, bill pay, e-statement, mobile deposit, digital wallet, and ATM services; title insurance and other financial institution-related products and services; and treasury and corporate cash management services. Carter Bankshares, Inc. was founded in 1974 and is headquartered in Martinsville, Virginia.

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.