PNC Financial Services Group (NYSE:PNC) and Fifth Third Bancorp (NASDAQ:FITB) are both large-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.
Valuation & Earnings
This table compares PNC Financial Services Group and Fifth Third Bancorp's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| PNC Financial Services Group | $21.62 billion | 2.20 | $5.37 billion | $11.39 | 9.84 |
| Fifth Third Bancorp | $9.79 billion | 1.73 | $2.51 billion | $2.77 | 8.57 |
PNC Financial Services Group has higher revenue and earnings than Fifth Third Bancorp. Fifth Third Bancorp is trading at a lower price-to-earnings ratio than PNC Financial Services Group, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
PNC Financial Services Group has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500. Comparatively, Fifth Third Bancorp has a beta of 1.65, suggesting that its share price is 65% more volatile than the S&P 500.
Profitability
This table compares PNC Financial Services Group and Fifth Third Bancorp's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| PNC Financial Services Group | 35.52% | 5.78% | 0.67% |
| Fifth Third Bancorp | 16.55% | 7.37% | 0.81% |
Analyst Recommendations
This is a breakdown of current recommendations and price targets for PNC Financial Services Group and Fifth Third Bancorp, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| PNC Financial Services Group | 2 | 9 | 7 | 0 | 2.28 |
| Fifth Third Bancorp | 1 | 6 | 12 | 0 | 2.58 |
PNC Financial Services Group currently has a consensus price target of $121.7143, suggesting a potential upside of 8.62%. Fifth Third Bancorp has a consensus price target of $24.50, suggesting a potential upside of 3.16%. Given PNC Financial Services Group's higher probable upside, research analysts plainly believe PNC Financial Services Group is more favorable than Fifth Third Bancorp.
Dividends
PNC Financial Services Group pays an annual dividend of $4.60 per share and has a dividend yield of 4.1%. Fifth Third Bancorp pays an annual dividend of $1.08 per share and has a dividend yield of 4.5%. PNC Financial Services Group pays out 40.4% of its earnings in the form of a dividend. Fifth Third Bancorp pays out 39.0% 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. PNC Financial Services Group has increased its dividend for 9 consecutive years and Fifth Third Bancorp has increased its dividend for 3 consecutive years. Fifth Third Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional & Insider Ownership
79.5% of PNC Financial Services Group shares are owned by institutional investors. Comparatively, 78.5% of Fifth Third Bancorp shares are owned by institutional investors. 0.3% of PNC Financial Services Group shares are owned by insiders. Comparatively, 0.5% of Fifth Third Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Summary
Fifth Third Bancorp beats PNC Financial Services Group on 9 of the 17 factors compared between the two stocks.
