M&T Bank (NYSE:MTB) and The PNC Financial Services Group (NYSE:PNC) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.
Valuation and Earnings
This table compares M&T Bank and The PNC Financial Services Group's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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M&T Bank | $6.94 billion | 2.85 | $1.93 billion | $13.75 | 11.17 |
The PNC Financial Services Group | $21.62 billion | 3.50 | $5.37 billion | $11.39 | 15.67 |
The PNC Financial Services Group has higher revenue and earnings than M&T Bank. M&T Bank 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.
Profitability
This table compares M&T Bank and The PNC Financial Services Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
M&T Bank | 21.49% | 9.45% | 1.06% |
The PNC Financial Services Group | 38.16% | 5.97% | 0.69% |
Insider & Institutional Ownership
82.7% of M&T Bank shares are owned by institutional investors. Comparatively, 80.6% of The PNC Financial Services Group shares are owned by institutional investors. 0.6% of M&T Bank shares are owned by insiders. Comparatively, 0.3% of The PNC Financial Services Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Dividends
M&T Bank pays an annual dividend of $4.40 per share and has a dividend yield of 2.9%. The PNC Financial Services Group pays an annual dividend of $4.60 per share and has a dividend yield of 2.6%. M&T Bank pays out 32.0% of its earnings in the form of a dividend. The PNC Financial Services Group pays out 40.4% 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. M&T Bank has increased its dividend for 1 consecutive years and The PNC Financial Services Group has increased its dividend for 1 consecutive years. M&T Bank is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a summary of current recommendations for M&T Bank and The PNC Financial Services Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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M&T Bank | 1 | 7 | 4 | 0 | 2.25 |
The PNC Financial Services Group | 1 | 12 | 7 | 0 | 2.30 |
M&T Bank currently has a consensus price target of $139.40, suggesting a potential downside of 9.47%. The PNC Financial Services Group has a consensus price target of $160.1176, suggesting a potential downside of 10.02%. Given M&T Bank's higher probable upside, analysts plainly believe M&T Bank is more favorable than The PNC Financial Services Group.
Volatility and Risk
M&T Bank has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500. Comparatively, 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.
Summary
M&T Bank beats The PNC Financial Services Group on 9 of the 16 factors compared between the two stocks.