Is First Horizon’s (FHN) Dividend Policy a Signal of Enduring Earnings Strength or Cautious Optimism?

• First Horizon Corporation recently announced board-approved quarterly cash dividends for both its common and multiple preferred shares, including a US$0.15 per common share dividend payable in October 2025.
• The diverse dividend affirmations underscore the company’s ongoing focus on shareholder returns and indicate confidence in earnings sustainability, backed by a moderate payout ratio and consistent earnings growth.
• Next, we'll explore how First Horizon’s continued dividend payments reflect management’s focus on capital returns and their impact on the updated investment narrative.

Find companies with promising cash flow potential yet trading below their fair value.

First Horizon Investment Narrative Recap

To own First Horizon stock today, you need confidence that disciplined cost management, earnings resilience, and stable capital returns can offset the pressures of a turbulent macroeconomic environment. The recent reaffirmation of dividends signals short-term strength in capital discipline, but the company’s biggest near-term risk, persistent credit quality concerns from heightened provision expenses, remains unchanged and is not materially impacted by this announcement.

The board’s fresh dividend declaration for both common and preferred shares is particularly relevant, as it signals management’s ongoing intent to maintain predictable shareholder returns even as net charge-offs continue to edge upward. This is important, given the bank's catalyst of controlling deposit costs, which could support net interest margins if sustained in the quarters ahead.

However, despite the solid dividend, investors should be aware that the upward trend in charge-offs could still pose...

Read the full narrative on First Horizon (it's free!)

First Horizon's narrative projects $3.7 billion revenue and $973.3 million earnings by 2028. This requires 6.5% yearly revenue growth and a $157.3 million earnings increase from $816.0 million.

Uncover how First Horizon's forecasts yield a $24.39 fair value, a 13% upside to its current price.

Exploring Other Perspectives

Individual fair value estimates from three Simply Wall St Community members span from US$24.39 to US$40.52 per share. While opinions differ, many are watching how ongoing credit quality pressures may affect earnings across the banking sector.

Explore 3 other fair value estimates on First Horizon - why the stock might be worth as much as 87% more than the current price!

Build Your Own First Horizon Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your First Horizon research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free First Horizon research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate First Horizon's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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