The PNC Financial Services Group (NYSE:PNC) & Arrow Financial (NASDAQ:AROW) Head to Head Review

Arrow Financial (NASDAQ:AROWGet Rating) and The PNC Financial Services Group (NYSE:PNCGet Rating) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, profitability, risk and earnings.

Profitability

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

Net Margins Return on Equity Return on Assets
Arrow Financial 33.05% 13.60% 1.23%
The PNC Financial Services Group 26.14% 12.43% 1.22%

Analyst Ratings

This is a summary of recent ratings and target prices for Arrow Financial and The PNC Financial Services Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arrow Financial 0 0 0 0 N/A
The PNC Financial Services Group 1 9 8 0 2.39

The PNC Financial Services Group has a consensus price target of $219.44, indicating a potential upside of 32.11%. Given The PNC Financial Services Group’s higher possible upside, analysts plainly believe The PNC Financial Services Group is more favorable than Arrow Financial.

Institutional and Insider Ownership

43.8% of Arrow Financial shares are held by institutional investors. Comparatively, 82.6% of The PNC Financial Services Group shares are held by institutional investors. 4.2% of Arrow Financial shares are held by insiders. Comparatively, 0.3% of The PNC Financial Services Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Arrow Financial pays an annual dividend of $1.08 per share and has a dividend yield of 3.5%. The PNC Financial Services Group pays an annual dividend of $6.00 per share and has a dividend yield of 3.6%. Arrow Financial pays out 35.5% of its earnings in the form of a dividend. The PNC Financial Services Group pays out 50.8% 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. Arrow Financial has raised its dividend for 21 consecutive years and The PNC Financial Services Group has raised its dividend for 12 consecutive years.

Valuation and Earnings

This table compares Arrow Financial and The PNC Financial Services Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Arrow Financial $147.92 million 3.39 $49.86 million $3.05 10.28
The PNC Financial Services Group $19.70 billion 3.53 $5.67 billion $11.82 14.05

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

Volatility and Risk

Arrow Financial has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, The PNC Financial Services Group has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.

Summary

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

Arrow Financial Company Profile (Get Rating)

Arrow Financial Corporation, a bank holding company, provides commercial and consumer banking, and financial products and services. The company's deposit products include demand deposits, interest-bearing checking accounts, savings deposits, time deposits, and other time deposits. Its lending activities comprise commercial loans, such as term loans, time notes, and lines of credit; and commercial real estate loans to finance real estate purchases, refinancing, expansions, and improvements to commercial properties, as well as commercial construction and land development loans to finance projects. The company's lending activities also include consumer installment loans to finance personal expenditures, personal lines of credit, overdraft protection, and automobile loans; and residential real estate loans, fixed home equity loans, and home equity lines of credit for consumers to finance home improvements, debt consolidation, education, and other uses. In addition, it maintains an indirect lending program; and sells residential real estate loan originations into the secondary market. Further, the company provides retirement planning, trust, and estate administration services for individuals; and pension, profit-sharing, and employee benefit plan administration services for corporations. Additionally, it offers insurance agency services comprising group health care policies and life insurance, and property and casualty insurance products; and investment advisory services to its proprietary mutual funds, as well as holds a real estate investment trust. The company operates in the northeastern region of New York State in Warren, Washington, Saratoga, Essex, Clinton, Rensselaer, Albany, and Schenectady counties, as well as surrounding areas. It owns 26 branch banking offices; and leases 12 branch banking offices, as well as two residential loan origination offices. Arrow Financial Corporation was founded in 1851 and is headquartered in Glens Falls, New York.

The PNC Financial Services Group Company Profile (Get Rating)

The PNC Financial Services Group, Inc. operates as a diversified financial services company in the United States. The company's Retail Banking segment offers brokerage, insurance, and investment and cash management services; checking, savings, and money market accounts; certificates of deposits; and lending products, which includes residential mortgages, home equity loans and lines of credit, auto loans, education loans, and personal and small business loans, and credit cards to consumer and small business customers through a network of branches, ATMs, call centers, and online and mobile banking channels. 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 services; foreign exchange, derivatives, fixed income, securities underwriting, loan syndications, and mergers and acquisitions and equity capital markets advisory related services; and commercial loan servicing and technology solutions for the commercial real estate finance industry. The company's Asset Management Group segment offers investment and retirement planning, customized investment management, credit and cash management solutions, private banking, and trust management and administration solutions; and multi-generational family planning products, such as estate, financial, tax planning, fiduciary, and customized performance reporting services. This segment also provides outsourced chief investment officer, custody, private real estate, cash and fixed income client solutions, and fiduciary retirement advisory services. As of December 31, 2021, it operated 2,629 branches and 9,523 ATMs. The PNC Financial Services Group, Inc. was founded in 1852 and is headquartered in Pittsburgh, Pennsylvania.

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