The PNC Financial Services Group (NYSE:PNC) and Banner (NASDAQ:BANR) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.
Dividends
The PNC Financial Services Group pays an annual dividend of $4.60 per share and has a dividend yield of 2.6%. Banner pays an annual dividend of $1.64 per share and has a dividend yield of 3.0%. The PNC Financial Services Group pays out 40.4% of its earnings in the form of a dividend. Banner pays out 37.4% 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. The PNC Financial Services Group has raised its dividend for 1 consecutive years and Banner has raised its dividend for 1 consecutive years. Banner is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for The PNC Financial Services Group and Banner, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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The PNC Financial Services Group | 1 | 12 | 7 | 0 | 2.30 |
Banner | 0 | 2 | 1 | 1 | 2.75 |
The PNC Financial Services Group currently has a consensus price target of $160.1176, suggesting a potential downside of 11.15%. Banner has a consensus price target of $56.00, suggesting a potential upside of 2.41%. Given Banner's stronger consensus rating and higher probable upside, analysts clearly believe Banner is more favorable than The PNC Financial Services Group.
Insider and Institutional Ownership
80.6% of The PNC Financial Services Group shares are owned by institutional investors. Comparatively, 82.5% of Banner shares are owned by institutional investors. 0.3% of The PNC Financial Services Group shares are owned by insiders. Comparatively, 2.1% of Banner shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Profitability
This table compares The PNC Financial Services Group and Banner's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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The PNC Financial Services Group | 38.16% | 5.97% | 0.69% |
Banner | 17.88% | 7.38% | 0.88% |
Volatility and Risk
The PNC Financial Services Group has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500. Comparatively, Banner has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500.
Valuation and Earnings
This table compares The PNC Financial Services Group and Banner's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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The PNC Financial Services Group | $21.62 billion | 3.53 | $5.37 billion | $11.39 | 15.82 |
Banner | $607.63 million | 3.13 | $146.28 million | $4.38 | 12.48 |
The PNC Financial Services Group has higher revenue and earnings than Banner. Banner is trading at a lower price-to-earnings ratio than The PNC Financial Services Group, indicating that it is currently the more affordable of the two stocks.
Summary
Banner beats The PNC Financial Services Group on 10 of the 17 factors compared between the two stocks.