The PNC Financial Services Group (NYSE:PNC) and German American Bancorp (NASDAQ:GABC) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, risk, institutional ownership, profitability and valuation.
Risk and Volatility
The PNC Financial Services Group has a beta of 1.38, indicating that its share price is 38% more volatile than the S&P 500. Comparatively, German American Bancorp has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500.
Institutional and Insider Ownership
80.6% of The PNC Financial Services Group shares are held by institutional investors. Comparatively, 42.0% of German American Bancorp shares are held by institutional investors. 0.3% of The PNC Financial Services Group shares are held by company insiders. Comparatively, 7.8% of German American Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Profitability
This table compares The PNC Financial Services Group and German American Bancorp'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% |
German American Bancorp | 25.10% | 9.72% | 1.24% |
Dividends
The PNC Financial Services Group pays an annual dividend of $4.60 per share and has a dividend yield of 2.7%. German American Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 1.9%. The PNC Financial Services Group pays out 40.4% of its earnings in the form of a dividend. German American Bancorp pays out 35.7% 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 increased its dividend for 1 consecutive years and German American Bancorp has increased its dividend for 1 consecutive years.
Analyst Recommendations
This is a breakdown of current ratings and price targets for The PNC Financial Services Group and German American Bancorp, 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 | 9 | 0 | 2.36 |
German American Bancorp | 0 | 2 | 0 | 0 | 2.00 |
The PNC Financial Services Group presently has a consensus target price of $174.00, indicating a potential upside of 1.32%. German American Bancorp has a consensus target price of $30.00, indicating a potential downside of 31.74%. Given The PNC Financial Services Group's stronger consensus rating and higher possible upside, analysts plainly believe The PNC Financial Services Group is more favorable than German American Bancorp.
Valuation & Earnings
This table compares The PNC Financial Services Group and German American Bancorp's gross revenue, earnings per share (EPS) 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 | 3.37 | $5.37 billion | $11.39 | 15.08 |
German American Bancorp | $221.98 million | 5.25 | $59.22 million | $2.35 | 18.70 |
The PNC Financial Services Group has higher revenue and earnings than German American Bancorp. The PNC Financial Services Group is trading at a lower price-to-earnings ratio than German American Bancorp, indicating that it is currently the more affordable of the two stocks.
Summary
The PNC Financial Services Group beats German American Bancorp on 10 of the 16 factors compared between the two stocks.