The PNC Financial Services Group (NYSE:PNC) and National Bank (NYSE:NBHC) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, risk, profitability, analyst recommendations and dividends.
Insider & Institutional Ownership
80.6% of The PNC Financial Services Group shares are held by institutional investors. Comparatively, 97.7% of National Bank shares are held by institutional investors. 0.3% of The PNC Financial Services Group shares are held by insiders. Comparatively, 4.5% of National Bank shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Analyst Ratings
This is a summary of current recommendations and price targets for The PNC Financial Services Group and National Bank, as provided 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 | 8 | 0 | 2.33 |
National Bank | 0 | 2 | 0 | 0 | 2.00 |
The PNC Financial Services Group currently has a consensus target price of $147.4118, suggesting a potential downside of 3.38%. National Bank has a consensus target price of $31.50, suggesting a potential downside of 12.50%. Given The PNC Financial Services Group's stronger consensus rating and higher probable upside, equities analysts clearly believe The PNC Financial Services Group is more favorable than National Bank.
Valuation & Earnings
This table compares The PNC Financial Services Group and National Bank'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 | 2.99 | $5.37 billion | $11.39 | 13.40 |
National Bank | $325.35 million | 3.39 | $80.36 million | $2.55 | 14.12 |
The PNC Financial Services Group has higher revenue and earnings than National Bank. The PNC Financial Services Group is trading at a lower price-to-earnings ratio than National Bank, indicating that it is currently the more affordable of the two stocks.
Dividends
The PNC Financial Services Group pays an annual dividend of $4.60 per share and has a dividend yield of 3.0%. National Bank pays an annual dividend of $0.80 per share and has a dividend yield of 2.2%. The PNC Financial Services Group pays out 40.4% of its earnings in the form of a dividend. National Bank pays out 31.4% 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. The PNC Financial Services Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares The PNC Financial Services Group and National Bank'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% |
National Bank | 23.03% | 10.63% | 1.33% |
Volatility & Risk
The PNC Financial Services Group has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500. Comparatively, National Bank has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.
Summary
The PNC Financial Services Group beats National Bank on 10 of the 17 factors compared between the two stocks.