Reviewing The PNC Financial Services Group (NYSE:PNC) and First Horizon (NYSE:FHN)

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

Valuation and Earnings

This table compares First Horizon and The 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
First Horizon	$3.12 billion	2.91	$897.00 million	$1.43	11.62
The PNC Financial Services Group	$31.88 billion	2.22	$5.58 billion	$11.91	14.95

The PNC Financial Services Group has higher revenue and earnings than First Horizon. First Horizon 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.

Insider & Institutional Ownership

80.3% of First Horizon shares are owned by institutional investors. Comparatively, 83.5% of The PNC Financial Services Group shares are owned by institutional investors. 0.9% of First Horizon shares are owned by insiders. Comparatively, 0.4% of The PNC Financial Services Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Horizon	14.03%	8.84%	0.92%
The PNC Financial Services Group	15.53%	11.33%	1.03%

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Horizon	0	4	9	0	2.69
The PNC Financial Services Group	2	5	9	0	2.44

First Horizon presently has a consensus target price of $17.31, indicating a potential upside of 4.20%. The PNC Financial Services Group has a consensus target price of $177.02, indicating a potential downside of 0.60%. Given First Horizon’s stronger consensus rating and higher possible upside, equities research analysts plainly believe First Horizon is more favorable than The PNC Financial Services Group.

Dividends

First Horizon pays an annual dividend of $0.60 per share and has a dividend yield of 3.6%. The PNC Financial Services Group pays an annual dividend of $6.40 per share and has a dividend yield of 3.6%. First Horizon pays out 42.0% of its earnings in the form of a dividend. The PNC Financial Services Group pays out 53.7% 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 14 consecutive years. First Horizon is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

First Horizon has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500. Comparatively, The PNC Financial Services Group has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500.

Summary

The PNC Financial Services Group beats First Horizon on 10 of the 16 factors compared between the two stocks.

About First Horizon

First Horizon Corporation operates as the bank holding company for First Horizon Bank that provides various financial services. The company operates through Regional Banking and Specialty Banking segments. It offers general banking services for consumers, businesses, financial institutions, and governments. The company also accepts deposits; provides underwriting services for bank-eligible securities and other fixed-income securities by financial subsidiaries; sells loans and derivatives; financial planning; and offers investment and financial advisory services. In addition, it offers mortgage banking; loan syndications; brokerage services; commercial and business banking for business enterprises, consumer banking, and private client and wealth management services; capital markets, professional commercial real estate, mortgage warehouse and asset-based lending, franchise and equipment finance, tax credit finance, energy and healthcare finance, asset management, and corporate and correspondent banking services. Further, the company provides transaction processing services including check clearing services and remittance processing, credit cards, investment, and sale of mutual fund and retail insurances, as well as trust, fiduciary, and agency services. First Horizon Corporation was founded in 1864 and is headquartered in Memphis, Tennessee.

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.