TSX:FN

Stock Analysis Report

First National Financial

Executive Summary

First National Financial Corporation, through its subsidiaries, originates, underwrites, and services residential and commercial mortgages in Canada.


Snowflake Analysis

Established dividend payer with moderate growth potential.

Share Price & News

How has First National Financial's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FN's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

15.2%

FN

9.7%

CA Mortgage

4.5%

CA Market


1 Year Return

-20.1%

FN

-24.1%

CA Mortgage

-24.5%

CA Market

Return vs Industry: FN exceeded the Canadian Mortgage industry which returned -24.1% over the past year.

Return vs Market: FN exceeded the Canadian Market which returned -24.5% over the past year.


Shareholder returns

FNIndustryMarket
7 Day15.2%9.7%4.5%
30 Day-28.4%-39.2%-20.1%
90 Day-35.4%-45.3%-24.9%
1 Year-14.5%-20.1%-15.3%-24.1%-22.0%-24.5%
3 Year21.4%-8.2%-11.7%-25.8%-14.2%-22.2%
5 Year77.4%17.3%-11.9%-29.3%-1.9%-16.5%

Price Volatility Vs. Market

How volatile is First National Financial's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is First National Financial undervalued compared to its fair value and its price relative to the market?

4.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FN (CA$24.59) is trading below our estimate of fair value (CA$25.61)

Significantly Below Fair Value: FN is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: FN is poor value based on its PE Ratio (8.5x) compared to the Mortgage industry average (6.7x).

PE vs Market: FN is good value based on its PE Ratio (8.5x) compared to the Canadian market (10.3x).


Price to Earnings Growth Ratio

PEG Ratio: FN is poor value based on its PEG Ratio (2.8x)


Price to Book Ratio

PB vs Industry: FN is overvalued based on its PB Ratio (3.2x) compared to the CA Mortgage industry average (0.7x).


Next Steps

Future Growth

How is First National Financial forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

3.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FN's forecast earnings growth (3% per year) is above the savings rate (1.4%).

Earnings vs Market: FN's earnings (3% per year) are forecast to grow slower than the Canadian market (7.4% per year).

High Growth Earnings: FN's earnings are forecast to grow, but not significantly.

Revenue vs Market: FN's revenue (9% per year) is forecast to grow faster than the Canadian market (3.8% per year).

High Growth Revenue: FN's revenue (9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FN's Return on Equity is forecast to be high in 3 years time (33.6%)


Next Steps

Past Performance

How has First National Financial performed over the past 5 years?

11.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FN has high quality earnings.

Growing Profit Margin: FN's current net profit margins (34.2%) are lower than last year (35.1%).


Past Earnings Growth Analysis

Earnings Trend: FN's earnings have grown by 11.4% per year over the past 5 years.

Accelerating Growth: FN's earnings growth over the past year (6.5%) is below its 5-year average (11.4% per year).

Earnings vs Industry: FN earnings growth over the past year (6.5%) underperformed the Mortgage industry 12.7%.


Return on Equity

High ROE: Whilst FN's Return on Equity (31.55%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is First National Financial's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: FN has a low level of unsold assets or inventory.

Debt Coverage by Assets: FN's debt is covered by short term assets (assets are 1x debt).


Financial Institutions Analysis

Asset Level: FN's level of assets compared to its equity is very high.

Allowance for Bad Loans: Insufficient data to determine if FN has a sufficient allowance for bad loans.

Low Risk Liabilities: FN reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if FN has an acceptable proportion of non-loan assets held.

Low Risk Deposits: FN has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if FN has an appropriate level of bad loans.


Next Steps

Dividend

What is First National Financial's current dividend yield, its reliability and sustainability?

7.93%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: FN's dividend (7.93%) is higher than the bottom 25% of dividend payers in the Canadian market (2.71%).

High Dividend: FN's dividend (7.93%) is low compared to the top 25% of dividend payers in the Canadian market (8.69%).


Stability and Growth of Payments

Stable Dividend: FN's dividends per share have been stable in the past 10 years.

Growing Dividend: FN's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (65.7%), FN's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FN's dividends in 3 years are forecast to be covered by earnings (70% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

7.2yrs

Average management tenure


CEO

Stephen J. Smith

no data

Tenure

CA$762,956

Compensation

Mr. Stephen J. R. Smith serves as the Chairman at Peloton Capital Management. Mr. Stephen has been a Director of E-L Financial Corporation Limited since May 10, 2018. Mr. Stephen co-founded First National  ...


CEO Compensation Analysis

Compensation vs Market: Stephen J.'s total compensation ($USD539.60K) is below average for companies of similar size in the Canadian market ($USD1.71M).

Compensation vs Earnings: Stephen J.'s compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Stephen J. Smith
Co-Founderno dataCA$762.96k12.18% CA$179.6m
Jason Ellis
President & COO0.25yrCA$833.82kno data
Moray Tawse
Co-Founder13.83yrsCA$763.08k0.96% CA$14.1m
Robert Inglis
Chief Financial Officer11.25yrsCA$660.49kno data
Jeremy Wedgbury
Senior Vice President of Commercial Mortgagesno dataCA$770.58kno data
Hilda Wong
Senior VP & General Counsel7.17yrsno data0.00050% CA$7.4k
Scott McKenzie
Senior Vice President of Residential Mortgagesno dataCA$598.54kno data
Ernie Stapleton
President of Fundamentalno datano datano data

7.2yrs

Average Tenure

Experienced Management: FN's management team is seasoned and experienced (7.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Stephen J. Smith
Co-Founderno dataCA$762.96k12.18% CA$179.6m
Moray Tawse
Co-Founder13.83yrsCA$763.08k0.96% CA$14.1m
Robert Pearce
Independent Director2.67yrsCA$53.00k0.013% CA$184.5k
John Brough
Lead Independent Directorno dataCA$77.00kno data
Robert Mitchell
Independent Director13.67yrsCA$47.00k0.011% CA$163.2k
Duncan Newton Jackman
Independent Director13.67yrsCA$47.00k0.018% CA$270.4k
Barbara Palk
Independent Director7yrsCA$57.00k0.0050% CA$73.7k

13.7yrs

Average Tenure

64yo

Average Age

Experienced Board: FN's board of directors are seasoned and experienced ( 13.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: FN insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

First National Financial Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: First National Financial Corporation
  • Ticker: FN
  • Exchange: TSX
  • Founded: 1988
  • Industry: Thrifts and Mortgage Finance
  • Sector: Banks
  • Market Cap: CA$1.475b
  • Shares outstanding: 59.97m
  • Website: https://www.firstnational.ca

Number of Employees


Location

  • First National Financial Corporation
  • North Tower
  • Suite 1200
  • Toronto
  • Ontario
  • M5J 1V6
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FNTSX (The Toronto Stock Exchange)YesCommon SharesCACADJun 2006
FNLI.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJun 2006
FN.PRATSX (The Toronto Stock Exchange)PFD CL A SER 1CACADJan 2011

Biography

First National Financial Corporation, through its subsidiaries, originates, underwrites, and services residential and commercial mortgages in Canada. It offers single family residential, and multi-unit residential and commercial mortgages. The company provides its services through mortgage broker distribution channel, as well as through online. The company was founded in 1988 and is headquartered in Toronto, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/31 03:51
End of Day Share Price2020/03/30 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.