Analyzing TCF Financial (TCF) and PNC Financial Services Group (PNC)

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

Institutional and Insider Ownership

85.2% of TCF Financial shares are owned by institutional investors. Comparatively, 81.1% of PNC Financial Services Group shares are owned by institutional investors. 2.3% of TCF Financial shares are owned by company insiders. Comparatively, 0.4% of PNC Financial Services Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TCF Financial 1 10 4 0 2.20
PNC Financial Services Group 0 16 8 0 2.33

TCF Financial presently has a consensus target price of $24.65, indicating a potential upside of 0.14%. PNC Financial Services Group has a consensus target price of $149.39, indicating a potential upside of 10.58%. Given PNC Financial Services Group’s stronger consensus rating and higher possible upside, analysts plainly believe PNC Financial Services Group is more favorable than TCF Financial.

Profitability

This table compares TCF Financial and PNC Financial Services Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TCF Financial 19.62% 10.86% 1.12%
PNC Financial Services Group 29.85% 9.82% 1.22%

Dividends

TCF Financial pays an annual dividend of $0.60 per share and has a dividend yield of 2.4%. PNC Financial Services Group pays an annual dividend of $3.00 per share and has a dividend yield of 2.2%. TCF Financial pays out 50.0% of its earnings in the form of a dividend. PNC Financial Services Group pays out 35.3% 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 raised its dividend for 7 consecutive years.

Risk and Volatility

TCF Financial has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500. Comparatively, PNC Financial Services Group has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500.

Valuation and Earnings

This table compares TCF Financial and PNC Financial Services Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TCF Financial $1.47 billion 2.82 $268.63 million $1.20 20.52
PNC Financial Services Group $18.04 billion 3.52 $5.34 billion $8.50 15.89

PNC Financial Services Group has higher revenue and earnings than TCF Financial. PNC Financial Services Group is trading at a lower price-to-earnings ratio than TCF Financial, indicating that it is currently the more affordable of the two stocks.

Summary

PNC Financial Services Group beats TCF Financial on 11 of the 17 factors compared between the two stocks.

TCF Financial Company Profile

TCF Financial Corporation operates as the holding company for TCF National Bank that provides various financial products and services in the United States and Canada. It operates through Consumer Banking, Wholesale Banking, and Enterprise Services segments. The company offers checking, savings, and money market accounts; certificates of deposits; and individual retirement accounts. It also provides consumer loans; loans secured by personal property, as well as unsecured personal loans; commercial real estate products; lease and equipment financing products; inventory financing products; and residential, consumer, and small business lending products. In addition, the company offers treasury services, such as investment and borrowing portfolios, as well as manages capital, debt, and market risks. Further, it provides credit, debit, and prepaid cards; and check cashing and remittance services. As of December 31, 2017, the company had 320 branches consisting of 189 traditional branches, 128 supermarket branches, and 3 campus branches. TCF Financial Corporation was founded in 1923 and is headquartered in Wayzata, Minnesota.

PNC Financial Services Group Company Profile

The PNC Financial Services Group, Inc. operates as a diversified financial services company in the United States and internationally. The company operates through four segments: Retail Banking, Corporate & Institutional Banking, Asset Management Group, and BlackRock. The Retail Banking segment offers deposit, lending, brokerage, and investment and cash management services to consumer and small business customers through a network of branches, ATMs, call centers, and online banking and mobile channels. As of December 31, 2017, this segment operated a network of 2,459 branches and 9,051 ATMs. The Corporate & Institutional Banking segment provides secured and unsecured loans, letters of credit, and equipment lease; and cash and investment management, receivables management, disbursement, fund transfer, information reporting, and trade, as well as foreign exchange, derivative, security underwriting, loan syndication, merger and acquisition advisory, and equity capital market advisory related services for corporations, government, and not-for-profit entities. This segment also offers commercial loan servicing and technology solutions for the commercial real estate finance industry. The Asset Management Group segment provides investment and retirement planning, customized investment management, private banking, credit, and trust management and administration solutions; multi-generational family planning products, such as estate, financial, tax planning, fiduciary, investment management and consulting, private banking, personal administrative, asset custody, and customized performance reporting services; advisory, custody, and retirement administration services; and mutual funds to high net worth and ultra high net worth clients, as well as institutions. The BlackRock segment offers investment and risk management services to institutional and retail clients. The PNC Financial Services Group, Inc. was founded in 1922 and is headquartered in Pittsburgh, Pennsylvania.

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