The PNC Financial Services Group (NYSE:PNC) and Wells Fargo & Company (NYSE:WFC) are both large-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, valuation and risk.
Dividends
The PNC Financial Services Group pays an annual dividend of $4.60 per share and has a dividend yield of 2.7%. Wells Fargo & Company pays an annual dividend of $0.40 per share and has a dividend yield of 1.1%. The PNC Financial Services Group pays out 40.4% of its earnings in the form of a dividend. Wells Fargo & Company pays out 9.1% 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 and Wells Fargo & Company has raised its dividend for 1 consecutive years.
Earnings & Valuation
This table compares The PNC Financial Services Group and Wells Fargo & Company'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 | 3.39 | $5.37 billion | $11.39 | 15.19 |
Wells Fargo & Company | $103.92 billion | 1.48 | $19.55 billion | $4.38 | 8.47 |
Wells Fargo & Company has higher revenue and earnings than The PNC Financial Services Group. Wells Fargo & Company 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 stock price is 38% more volatile than the S&P 500. Comparatively, Wells Fargo & Company has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent recommendations for The PNC Financial Services Group and Wells Fargo & Company, as provided by MarketBeat.
| 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 |
Wells Fargo & Company | 0 | 11 | 15 | 0 | 2.58 |
The PNC Financial Services Group currently has a consensus price target of $147.7059, suggesting a potential downside of 14.66%. Wells Fargo & Company has a consensus price target of $34.1250, suggesting a potential downside of 7.99%. Given Wells Fargo & Company's stronger consensus rating and higher probable upside, analysts clearly believe Wells Fargo & Company is more favorable than The PNC Financial Services Group.
Profitability
This table compares The PNC Financial Services Group and Wells Fargo & Company'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% |
Wells Fargo & Company | 3.72% | 3.18% | 0.26% |
Institutional and Insider Ownership
80.6% of The PNC Financial Services Group shares are held by institutional investors. Comparatively, 67.3% of Wells Fargo & Company shares are held by institutional investors. 0.3% of The PNC Financial Services Group shares are held by company insiders. Comparatively, 0.1% of Wells Fargo & Company shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Summary
The PNC Financial Services Group beats Wells Fargo & Company on 9 of the 16 factors compared between the two stocks.