The PNC Financial Services Group (NYSE:PNC) and Synovus Financial (NYSE:SNV) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, dividends, analyst recommendations, earnings and profitability.
Institutional & Insider Ownership
80.6% of The PNC Financial Services Group shares are held by institutional investors. Comparatively, 76.1% of Synovus Financial shares are held by institutional investors. 0.3% of The PNC Financial Services Group shares are held by insiders. Comparatively, 1.1% of Synovus Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds 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 2.6%. Synovus Financial pays an annual dividend of $1.32 per share and has a dividend yield of 2.9%. The PNC Financial Services Group pays out 40.4% of its earnings in the form of a dividend. Synovus Financial pays out 33.8% 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 increased its dividend for 1 consecutive years and Synovus Financial has increased its dividend for 4 consecutive years. Synovus Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a breakdown of current ratings and price targets for The PNC Financial Services Group and Synovus Financial, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| The PNC Financial Services Group | 1 | 12 | 7 | 0 | 2.30 |
| Synovus Financial | 0 | 1 | 8 | 0 | 2.89 |
The PNC Financial Services Group currently has a consensus price target of $160.1176, suggesting a potential downside of 11.15%. Synovus Financial has a consensus price target of $40.45, suggesting a potential downside of 12.01%. Given The PNC Financial Services Group's higher possible upside, research analysts plainly believe The PNC Financial Services Group is more favorable than Synovus Financial.
Profitability
This table compares The PNC Financial Services Group and Synovus Financial's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| The PNC Financial Services Group | 38.16% | 5.97% | 0.69% |
| Synovus Financial | 15.84% | 8.20% | 0.72% |
Earnings & Valuation
This table compares The PNC Financial Services Group and Synovus Financial'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 | 3.53 | $5.37 billion | $11.39 | 15.82 |
| Synovus Financial | $2.41 billion | 2.84 | $563.78 million | $3.90 | 11.79 |
The PNC Financial Services Group has higher revenue and earnings than Synovus Financial. Synovus 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
The PNC Financial Services Group has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500. Comparatively, Synovus Financial has a beta of 1.66, suggesting that its share price is 66% more volatile than the S&P 500.
Summary
Synovus Financial beats The PNC Financial Services Group on 10 of the 17 factors compared between the two stocks.
