The PNC Financial Services Group (NYSE:PNC) and First Horizon (NYSE:FHN) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.
Analyst Recommendations
This is a breakdown of recent recommendations for The PNC Financial Services Group and First Horizon, as provided by MarketBeat.
| 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 |
First Horizon | 0 | 2 | 6 | 1 | 2.89 |
The PNC Financial Services Group presently has a consensus price target of $160.1176, suggesting a potential downside of 11.43%. First Horizon has a consensus price target of $13.2778, suggesting a potential downside of 23.95%. Given The PNC Financial Services Group's higher possible upside, research analysts plainly believe The PNC Financial Services Group is more favorable than First Horizon.
Volatility and Risk
The PNC Financial Services Group has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500. Comparatively, First Horizon has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500.
Profitability
This table compares The PNC Financial Services Group and First Horizon'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% |
First Horizon | 23.18% | 7.78% | 0.79% |
Insider and Institutional Ownership
80.6% of The PNC Financial Services Group shares are owned by institutional investors. Comparatively, 81.9% of First Horizon shares are owned by institutional investors. 0.3% of The PNC Financial Services Group shares are owned by insiders. Comparatively, 2.0% of First Horizon shares are owned by 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.
Dividends
The PNC Financial Services Group pays an annual dividend of $4.60 per share and has a dividend yield of 2.5%. First Horizon pays an annual dividend of $0.60 per share and has a dividend yield of 3.4%. The PNC Financial Services Group pays out 40.4% of its earnings in the form of a dividend. First Horizon pays out 36.1% 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 First Horizon has raised its dividend for 6 consecutive years. First Horizon is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares The PNC Financial Services Group and First Horizon's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
The PNC Financial Services Group | $21.62 billion | 3.55 | $5.37 billion | $11.39 | 15.87 |
First Horizon | $2.28 billion | 4.24 | $440.91 million | $1.66 | 10.51 |
The PNC Financial Services Group has higher revenue and earnings than First Horizon. First Horizon 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
First Horizon beats The PNC Financial Services Group on 12 of the 18 factors compared between the two stocks.