First National Financial (FN) AI Stock Analysis

• Market Cap: C$2.35B
• Dividend Yield: 6.15%
• Average Volume (3M): 35.63K
• Price to Earnings (P/E): 12.0
• Beta (1Y): 0.82
• Revenue Growth: 16.99%
• EPS Growth: -19.87%
• Country: CA
• Employees: 1,624
• Sector: Financial
• Sector Strength: 77
• Industry: Banking
• EPS (TTM): 3.33
• Shares Outstanding: 59,967,430
• 10 Day Avg. Volume: 42,574
• 30 Day Avg. Volume: 35,630
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.51
• Price to Cash Flow (P/CF): -0.50
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$43.50
• Price Target Upside: 8.89% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

First National Financial shows a mixed outlook with significant financial vulnerabilities, particularly in liquidity and cash flow management. However, strong mortgage origination growth and consistent dividends provide some stability. The stock's valuation is appealing due to a reasonable P/E ratio and high dividend yield, but technical indicators suggest cautious optimism. Overall, while there are positive aspects, key financial risks necessitate careful consideration.

Positive Factors

Earnings Growth

FN appears on track to resume earnings growth underpinned by more accommodative monetary policies and improving housing market transaction activity.

Single-Family Outlook

Single-family outlook remains constructive with FN guiding for increased year-over-year origination in the next two quarters.

Negative Factors

Macro/Trade Uncertainty

Recent macro/trade developments introduce significant uncertainty that could delay a more meaningful recovery.

First National Financial Business Overview & Revenue Model

Company Description

First National Financial (FN) is a leading Canadian-based mortgage lender primarily involved in the business of residential and commercial mortgage financing. The company provides a wide range of mortgage products to homeowners and real estate investors, offering solutions tailored to meet various financial needs. FN operates within the financial services sector, focusing on delivering innovative and customer-centric mortgage solutions across Canada.

How the Company Makes Money

First National Financial makes money primarily through the origination and servicing of residential and commercial mortgages. The company earns revenue from interest income on the mortgage loans it holds and from fees associated with originating and underwriting these loans. FN also generates income from the sale of mortgages to institutional investors, where it retains servicing rights, thus earning ongoing servicing fees. Additionally, First National benefits from its partnerships with mortgage brokers and real estate professionals, which help drive new business and enhance its market reach.

First National Financial Financial Statement Overview

Summary

First National Financial faces a challenging financial position with declining revenue, high leverage, and negative cash flow. While profitability metrics like net profit margin remain strong, the reliance on debt and inability to convert income into cash are concerning. The balance sheet's high debt-to-equity ratio requires careful monitoring to ensure financial stability. Overall, the company's financial health shows vulnerabilities, notably in liquidity and operational cash flow.

Income Statement

The company's income statement shows mixed results. While there's a noticeable decline in total revenue from $751.4 million in 2023 to $587.6 million in 2024, the net profit margin remains relatively strong at 34.6% for 2024. However, the gross profit margin is misleading as it equates to total revenue, suggesting all revenue is considered as gross profit without accounting for costs. This highlights potential issues with cost management or reporting. Additionally, EBIT and EBITDA are not reported for 2024, which limits the assessment of operating performance.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 61.5, indicating significant leverage, which is typical for the banking industry but still poses potential risk if not managed carefully. The equity ratio is low at 1.4%, suggesting limited equity buffer against liabilities. Despite these concerns, the consistency in stockholders' equity over the years provides some stability. However, the high level of total liabilities compared to equity is a notable risk factor.

Cash Flow

Cash flow analysis indicates challenges with negative operating cash flow of -$763.7 million and free cash flow of -$768.1 million for 2024, reflecting potential liquidity issues. The free cash flow to net income ratio is negative, suggesting that the company's earnings are not translating into cash flow. This raises concerns about the sustainability of operations without external financing. The operating cash flow to net income ratio is also negative, further highlighting cash generation issues.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
587.61M	751.40M	698.99M	513.63M	459.87M
	Gross Profit
587.61M	-589.24M	-290.85M	-391.21M	-464.95M
	EBIT
0.00	550.91M	252.42M	263.82M	258.73M
	EBITDA
0.00	511.47M	0.00	321.91M	319.63M
	Net Income Common Stockholders
203.39M	252.81M	197.73M	194.56M	190.23M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	702.40M	-51.17M	-52.87M	-22.92M
	Total Assets
51.16B	45.96B	43.76B	42.27B	39.49B
	Total Debt
45.40B	40.61B	38.40B	36.99B	35.37B
	Net Debt
45.40B	40.61B	38.46B	37.05B	35.39B
	Total Liabilities
50.42B	45.22B	38.35B	37.12B	38.92B
	Stockholders Equity
738.21M	737.76M	698.98M	577.41M	570.80M
Cash Flow		Free Cash Flow
-768.10M	-109.71M	496.78M	-434.85M	-254.54M
	Operating Cash Flow
-763.72M	-103.51M	509.16M	-402.89M	-250.96M
	Investing Cash Flow
105.40M	-77.45M	-52.87M	-12.74M	145.83M
	Financing Cash Flow
663.69M	163.82M	-556.73M	133.05M	220.05M

First National Financial Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 39.95
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FN, the sentiment is Negative. The current price of 39.95 is below the 20-day moving average (MA) of 40.34, below the 50-day MA of 40.13, and above the 200-day MA of 37.97, indicating a neutral trend. The MACD of -0.08 indicates Positive momentum. The RSI at 39.06 is Neutral, neither overbought nor oversold. The STOCH value of 53.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:FN.

First National Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TD	76 Outperform	$148.65B	18.13	7.68%	5.08%	11.78%	-25.44%
CM	76 Outperform	$75.56B	10.55	13.23%	4.79%	10.79%	18.20%
MKP	75 Outperform	C$709.56M	9.13	13.72%	8.29%	26.81%	-6.49%
Sector *	64 Neutral	$13.80B	10.64	9.23%	4.22%	17.66%	-7.66%
FN	61 Neutral	C$2.35B	12.01	27.56%	6.15%	16.99%	-19.87%
LB	53 Neutral	$1.16B	―	-0.24%	7.40%	-3.68%	-111.41%

First National Financial Corporate Events

First National Financial Reports Strong Revenue Growth Amid Market Challenges

First National Financial Corporation reported a 19% increase in fourth-quarter revenue to $600.1 million, despite a 3% decrease in Pre-FMV Income. The annual revenue rose by 10% to $2.2 billion, although net income declined to $203.4 million. The company achieved a record $153.7 billion in Mortgages Under Administration, highlighting its resilience in a changing market. The CEO emphasized the company’s ability to capitalize on growth opportunities and maintain profitability, as evidenced by a 33% after-tax Pre-FMV return on equity and consistent dividend increases.

First National Financial Announces February 2025 Dividend Payment

First National Financial Corporation announced a monthly dividend payment of $0.208334 per common share for February 2025. This dividend will be payable on March 14, 2025, to shareholders of record by February 28, 2025, and is considered an eligible dividend for income tax purposes. This announcement reinforces First National’s commitment to providing consistent returns to its investors and highlights its stable position in the financial market.

First National Financial Announces Q4 2024 Financial Reporting Schedule

First National Financial Corporation has announced its schedule for the fourth quarter 2024 financial reporting. The company will release its earnings after market close on March 4, 2025, followed by an earnings call on March 5, 2025, at 10:00 am ET. This announcement provides stakeholders with key dates to gain insights into the company’s financial performance and strategic direction. By maintaining transparency and regular communication with investors, First National aims to reinforce its strong position in the mortgage industry.

First National Financial Corp Announces January Dividend

First National Financial Corporation announced a monthly dividend payment of $0.208334 per common share for the period of January 2025, which will be paid to shareholders on February 14, 2025. This announcement reflects the company’s ongoing commitment to providing shareholder value and underscores its strong position in the mortgage industry.

First National Financial Announces December Dividend Payouts

First National Financial Corporation has declared its monthly dividend of $0.208334 per common share, payable on January 15, 2025. The company also announced dividends for its Class A Series 1 and Series 2 Preference Shares, with payments scheduled for the same date. These dividends are designated as eligible under Canadian tax legislation.