Truist Financial (NYSE:TFC) and The PNC Financial Services Group (NYSE:PNC) are both large-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.
Valuation and Earnings
This table compares Truist Financial and The PNC Financial Services Group's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Truist Financial | $24.43 billion | 3.05 | $4.48 billion | $3.80 | 14.56 |
| The PNC Financial Services Group | $18.26 billion | 4.40 | $7.52 billion | $6.36 | 29.70 |
The PNC Financial Services Group has lower revenue, but higher earnings than Truist Financial. Truist Financial 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.
Risk & Volatility
Truist Financial has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500. Comparatively, The PNC Financial Services Group has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500.
Profitability
This table compares Truist Financial and The PNC Financial Services Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Truist Financial | 23.46% | 11.13% | 1.34% |
| The PNC Financial Services Group | 32.72% | 12.53% | 1.38% |
Analyst Recommendations
This is a summary of recent ratings and price targets for Truist Financial and The PNC Financial Services Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Truist Financial | 0 | 8 | 2 | 0 | 2.20 |
| The PNC Financial Services Group | 0 | 12 | 10 | 0 | 2.45 |
Truist Financial presently has a consensus price target of $60.5385, suggesting a potential upside of 9.41%. The PNC Financial Services Group has a consensus price target of $186.2250, suggesting a potential downside of 1.43%. Given Truist Financial's higher probable upside, equities analysts plainly believe Truist Financial is more favorable than The PNC Financial Services Group.
Dividends
Truist Financial pays an annual dividend of $1.92 per share and has a dividend yield of 3.5%. The PNC Financial Services Group pays an annual dividend of $5.00 per share and has a dividend yield of 2.6%. Truist Financial pays out 50.5% of its earnings in the form of a dividend. The PNC Financial Services Group pays out 78.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Truist Financial has raised its dividend for 1 consecutive years. Truist Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
70.8% of Truist Financial shares are owned by institutional investors. Comparatively, 81.8% of The PNC Financial Services Group shares are owned by institutional investors. 0.4% of Truist Financial shares are owned by company insiders. Comparatively, 0.3% of The PNC Financial Services Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Summary
The PNC Financial Services Group beats Truist Financial on 10 of the 17 factors compared between the two stocks.
