The PNC Financial Services Group (NYSE:PNC – Get Free Report) and First Commonwealth Financial (NYSE:FCF – Get Free Report) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, earnings, risk, institutional ownership and profitability.
Dividends
The PNC Financial Services Group pays an annual dividend of $6.20 per share and has a dividend yield of 4.0%. First Commonwealth Financial pays an annual dividend of $0.50 per share and has a dividend yield of 3.7%. The PNC Financial Services Group pays out 48.5% of its earnings in the form of a dividend. First Commonwealth Financial pays out 32.5% 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 13 consecutive years and First Commonwealth Financial has raised its dividend for 7 consecutive years. The PNC Financial Services Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
The PNC Financial Services Group has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500. Comparatively, First Commonwealth Financial has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for The PNC Financial Services Group and First Commonwealth Financial, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| The PNC Financial Services Group | 3 | 5 | 6 | 0 | 2.21 |
| First Commonwealth Financial | 0 | 0 | 2 | 0 | 3.00 |
The PNC Financial Services Group currently has a consensus target price of $146.59, indicating a potential downside of 5.43%. First Commonwealth Financial has a consensus target price of $14.75, indicating a potential upside of 9.06%. Given First Commonwealth Financial’s stronger consensus rating and higher possible upside, analysts clearly believe First Commonwealth Financial is more favorable than The PNC Financial Services Group.
Valuation and Earnings
This table compares The PNC Financial Services Group and First Commonwealth Financial’s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| The PNC Financial Services Group | $31.88 billion | 1.93 | $5.58 billion | $12.79 | 12.12 |
| First Commonwealth Financial | $626.61 million | 2.21 | $157.06 million | $1.54 | 8.78 |
The PNC Financial Services Group has higher revenue and earnings than First Commonwealth Financial. First Commonwealth 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.
Profitability
This table compares The PNC Financial Services Group and First Commonwealth Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| The PNC Financial Services Group | 17.50% | 12.27% | 1.09% |
| First Commonwealth Financial | 25.07% | 13.78% | 1.52% |
Institutional and Insider Ownership
83.5% of The PNC Financial Services Group shares are owned by institutional investors. Comparatively, 72.6% of First Commonwealth Financial shares are owned by institutional investors. 0.4% of The PNC Financial Services Group shares are owned by insiders. Comparatively, 2.0% of First Commonwealth Financial shares are owned 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.
Summary
The PNC Financial Services Group beats First Commonwealth Financial on 9 of the 17 factors compared between the two stocks.
About The PNC Financial Services Group
The PNC Financial Services Group, Inc. operates as a diversified financial services company in the United States. It operates through three segments: Retail Banking, Corporate & Institutional Banking, and Asset Management Group segments. The company’s Retail Banking segment offers checking, savings, and money market accounts, as well as time deposit; residential mortgages, home equity loans and lines of credit, auto loans, credit cards, education loans, and personal and small business loans and lines of credit; and brokerage, insurance, and investment and cash management services. This segment serves consumer and small business customers through a network of branches, digital channels, ATMs, and through phone-based customer contact centers. Its Corporate & Institutional Banking segment provides secured and unsecured loans, letters of credit, and equipment leases; cash and investment management services, receivables and disbursement management services, funds transfer services, international payment services, and access to online/mobile information management and reporting; securities underwriting, loan syndications, customer-related trading, and mergers and acquisitions and equity capital markets advisory related services; and commercial loan servicing and technology solutions. It serves mid-sized and large corporations, and government and not-for-profit entities. The company’s Asset Management Group segment offers investment and retirement planning, customized investment management, credit and cash management solutions, and trust management and administration services for high net worth and ultra high net worth individuals, and their families; and multi-generational family planning services for ultra high net worth individuals and their families. It also provides outsourced chief investment officer, custody, private real estate, cash and fixed income client solutions, and retirement plan fiduciary investment services for institutional clients. The company was founded in 1852 and is headquartered in Pittsburgh, Pennsylvania.
About First Commonwealth Financial
First Commonwealth Financial Corporation, a financial holding company, provides various consumer and commercial banking services in the United States. Its consumer services include personal checking accounts, interest-earning checking accounts, savings and health savings accounts, insured money market accounts, debit cards, investment certificates, fixed and variable rate certificates of deposit, mortgage loans, secured and unsecured installment loans, construction and real estate loans, safe deposit facilities, credit cards, credit lines with overdraft checking protection, IRA accounts, and automated teller machine (atm) services, as well as internet, mobile, and telephone banking services. The company’s commercial banking services comprise commercial lending, business checking accounts, online account management services, payroll direct deposits, commercial cash management services, and repurchase agreements, as well as ACH origination services. In addition, it offers various trust and asset management services; auto, home, and business insurance, as well as term life insurance; and annuities, mutual funds, and stock and bond brokerage services through a broker-dealer and insurance brokers. The company was founded in 1934 and is headquartered in Indiana, Pennsylvania.
Receive News & Ratings for The PNC Financial Services Group Daily – Enter your email address below to receive a concise daily summary of the latest news and analysts’ ratings for The PNC Financial Services Group and related companies with MarketBeat.com’s FREE daily email newsletter.
Source: defenseworld.net
