Critical Survey: The PNC Financial Services Group (NYSE:PNC) vs. Synovus Financial (NYSE:SNV)

The PNC Financial Services Group (NYSE:PNC) and Synovus Financial (NYSE:SNV) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Institutional and Insider Ownership

83.5% of The PNC Financial Services Group shares are owned by institutional investors. Comparatively, 83.9% of Synovus Financial shares are owned by institutional investors. 0.4% of The PNC Financial Services Group shares are owned by company insiders. Comparatively, 0.8% of Synovus Financial shares are owned by company 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.

Earnings and Valuation

This table compares The PNC Financial Services Group and Synovus Financial’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The PNC Financial Services Group	$31.88 billion	2.27	$5.58 billion	$11.91	15.31
Synovus Financial	$3.45 billion	1.84	$543.71 million	$2.92	15.08

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.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for The PNC Financial Services Group and Synovus Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The PNC Financial Services Group	2	6	9	0	2.41
Synovus Financial	0	6	10	0	2.63

The PNC Financial Services Group currently has a consensus target price of $177.02, indicating a potential downside of 2.93%. Synovus Financial has a consensus target price of $46.44, indicating a potential upside of 5.47%. Given Synovus Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Synovus Financial is more favorable than The PNC Financial Services Group.

Risk & Volatility

The PNC Financial Services Group has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500. Comparatively, Synovus Financial has a beta of 1.39, indicating that its share price is 39% more volatile than the S&P 500.

Dividends

The PNC Financial Services Group pays an annual dividend of $6.40 per share and has a dividend yield of 3.5%. Synovus Financial pays an annual dividend of $1.52 per share and has a dividend yield of 3.5%. The PNC Financial Services Group pays out 53.7% of its earnings in the form of a dividend. Synovus Financial pays out 52.1% 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 increased its dividend for 14 consecutive years. The PNC Financial Services Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

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	15.53%	11.33%	1.03%
Synovus Financial	8.40%	12.76%	0.95%

Summary

The PNC Financial Services Group beats Synovus 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 Synovus Financial

Synovus Financial Corp. operates as the bank holding company for Synovus Bank that provides commercial and consumer banking products and services. It operates through four segments: Community Banking, Wholesale Banking, Consumer Banking, and Financial Management Services. The company's commercial banking services include treasury and asset management, capital market, and institutional trust services, as well as commercial, financial, and real estate lending services. Its consumer banking services comprise accepting customary types of demand and savings deposits accounts; mortgage, installment, and other consumer loans; investment and brokerage services; safe deposit services; automated banking services; automated fund transfers; internet-based banking services; and bank credit and debit card services, including Visa and MasterCard services. The company also offers various other financial services, including portfolio management for fixed-income securities, investment banking, execution of securities transactions as a broker/dealer, trust management, and financial planning services, as well as provides individual investment advice on equity and other securities. The company was founded in 1888 and is headquartered in Columbus, Georgia.