First National Financial (FN) AI Stock Analysis

• Market Cap: C$2.47B
• Dividend Yield: 8.31%
• Average Volume (3M): 30.18K
• Price to Earnings (P/E): 14.2
• Beta (1Y): 0.88
• Revenue Growth: 13.85%
• EPS Growth: -33.76%
• Country: CA
• Employees: 1,773
• Sector: Financial
• Sector Strength: 78
• Industry: Financial - Mortgages
• EPS (TTM): 0.70
• Shares Outstanding: 59,967,430
• 10 Day Avg. Volume: 25,276
• 30 Day Avg. Volume: 30,177
• PEG Ratio: 7.07
• Price to Book (P/B): 3.12
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.40
• 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$41.00
• Price Target Upside: -0.63% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 57 Neutral
• Price Target: ―

First National Financial's overall stock score reflects a mixed picture. Strengths include a high dividend yield and potential undervaluation. However, significant risks include high leverage, negative cash flow, and technical indicators suggesting downward pressure. The earnings call's cautiously optimistic tone and recent dividend announcements provide some balance, but financial vulnerabilities remain a concern.

Positive Factors

Earnings Growth

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

Origination Outlook

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

Valuation

Valuations normalizing near long-term average with the stock trading at 10.5x earnings and a 6.3% dividend yield.

Negative Factors

Economic Uncertainty

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

Tariff Impact

Tariff uncertainty may affect Canada negatively and could have an unfavorable impact on the Company, particularly if employment is affected in future periods.

First National Financial Business Overview & Revenue Model

Company Description

First National Financial Corporation, together with its subsidiaries, originates, underwrites, and services commercial and residential mortgages in Canada. The company operates in two segments, Residential and Commercial segments. 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 online. First National Financial Corporation was founded in 1988 and is headquartered in Toronto, Canada.

How the Company Makes Money

First National Financial generates revenue primarily through its mortgage lending activities. The company earns interest income from the mortgages it originates and services. It also generates fees from underwriting and processing mortgage applications. Additionally, FN earns income by securitizing mortgages and selling them to investors, which provides liquidity and allows the company to originate more loans. Significant partnerships with financial institutions and access to capital markets are crucial factors that support FN's ability to maintain its lending operations and expand its market reach.

First National Financial Financial Statement Overview

Summary

First National Financial is facing challenges with declining revenue, high leverage, and negative cash flow. Despite a strong net profit margin, the company struggles with cost management and cash conversion, and its high debt-to-equity ratio poses a significant risk.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.35B	587.61M	751.40M	698.99M	513.63M	459.87M
Gross Profit	567.85M	587.61M	-589.24M	-290.85M	-391.21M	-464.95M
EBITDA	423.56M	453.28M	511.47M	0.00	321.91M	319.63M
Net Income	178.07M	203.39M	252.81M	197.73M	194.56M	190.23M
Balance Sheet
Total Assets	52.17B	51.16B	45.96B	43.76B	42.27B	39.49B
Cash, Cash Equivalents and Short-Term Investments	0.00	0.00	702.40M	-51.17M	-52.87M	-22.92M
Total Debt	46.90B	45.40B	40.61B	38.40B	36.99B	35.37B
Total Liabilities	51.46B	50.42B	45.22B	38.35B	37.12B	38.92B
Stockholders Equity	715.86M	738.21M	737.76M	698.98M	577.41M	570.80M
Cash Flow
Free Cash Flow	-562.73M	-768.10M	-109.71M	496.78M	-434.85M	-254.54M
Operating Cash Flow	-559.32M	-763.72M	-103.51M	509.16M	-402.89M	-250.96M
Investing Cash Flow	-2.27M	105.40M	-77.45M	-52.87M	-12.74M	145.83M
Financing Cash Flow	720.51M	663.69M	163.82M	-556.73M	133.05M	220.05M

First National Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 41.26
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FN, the sentiment is Positive. The current price of 41.26 is above the 20-day moving average (MA) of 39.68, above the 50-day MA of 38.82, and above the 200-day MA of 39.03, indicating a bullish trend. The MACD of 0.79 indicates Negative momentum. The RSI at 73.39 is Negative, neither overbought nor oversold. The STOCH value of 88.22 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:FN.

First National Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MKP	74 Outperform	C$755.62M	10.40	11.99%	8.52%	19.71%	-15.59%
TF	73 Outperform	C$633.06M	13.64	6.74%	12.48%	-8.68%	-25.42%
AI	68 Neutral	C$547.94M	11.05	9.47%	11.18%	-1.56%	-9.70%
FC	67 Neutral	C$450.39M	12.03	8.89%	10.48%	-4.56%	0.77%
DLCG	63 Neutral	C$700.79M	37.65	-151.96%	2.46%	35.48%	-4412.25%
Sector *	58 Neutral	$12.55B	5.32	-2.71%	5.27%	5.88%	-56.03%
FN	57 Neutral	C$2.47B	14.20	24.01%	8.31%	13.85%	-33.76%

First National Financial Corporate Events

First National Financial Reports Q1 2025 Results with Record MUA Growth

First National Financial Corporation reported a 7% increase in Mortgages Under Administration (MUA) to a record $155.4 billion for the first quarter of 2025, with revenue rising 2% to $528.9 million. Despite these gains, net income fell to $24.6 million due to lower mortgage servicing revenue, falling interest rates, and planned investments. The company anticipates future profitability from its securitization and servicing portfolios, with expectations of continued origination growth in the second quarter.

Spark’s Take on TSE:FN Stock

According to Spark, TipRanks’ AI Analyst, TSE:FN is a Neutral.

First National Financial’s stock score reflects a mixed picture. Financial vulnerabilities such as high leverage and negative cash flow are key risks. However, strengths in mortgage growth and a high dividend yield provide some balance. Technical analysis shows potential downside risks, and the earnings call suggests cautious optimism amid operational challenges.

To see Spark’s full report on TSE:FN stock, click here.

First National Financial Announces April Dividend Payment

First National Financial Corporation announced a monthly dividend payment of $0.208334 per common share for April 2025, payable on May 15, 2025. This announcement underscores the company’s commitment to providing returns to its shareholders and reflects its strong position in the mortgage industry as one of the leading non-bank mortgage originators and underwriters in Canada.

Spark’s Take on TSE:FN Stock

According to Spark, TipRanks’ AI Analyst, TSE:FN is a Neutral.

First National Financial’s overall stock score reflects a mixed picture. The company has significant strengths in mortgage growth and maintains a high dividend yield, appealing to income-focused investors. However, financial vulnerabilities such as high leverage and negative cash flow pose risks. Additionally, technical indicators imply potential downward pressure. The earnings call’s cautiously optimistic tone balances some of these concerns, highlighting strategic growth areas while acknowledging challenges.

To see Spark’s full report on TSE:FN stock, click here.

First National Financial Announces Q1 2025 Earnings Call

First National Financial Corporation has announced its schedule for the first quarter 2025 financial reporting. The company will release its financial results on April 29, 2025, after market close, followed by an earnings call on April 30, 2025. This announcement highlights the company’s transparency and commitment to keeping stakeholders informed, potentially impacting its market positioning and stakeholder confidence.

First National Financial Announces March Dividend Details

First National Financial Corporation announced its March dividend details, including a monthly dividend of $0.208334 per common share and quarterly dividends for its Class A Series 1 and Series 2 Preference Shares. The dividends will be payable on April 15, 2025, to shareholders of record as of March 31, 2025. The company also set a dividend rate of 4.908% for its Class A Series 2 Preference Shares for the next quarter. These dividends are designated as eligible under Canadian tax legislation, reflecting First National’s continued commitment to providing returns to its investors.

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.