Financial Analysis: Dime Community Bancshares (NASDAQ:DCOM) versus The PNC Financial Services Group (NYSE:PNC)

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

Institutional and Insider Ownership

72.3% of Dime Community Bancshares shares are held by institutional investors. Comparatively, 83.5% of The PNC Financial Services Group shares are held by institutional investors. 15.3% of Dime Community Bancshares 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.

Analyst Ratings

This is a summary of recent recommendations and price targets for Dime Community Bancshares and The PNC Financial Services Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dime Community Bancshares 0 0 1 0 3.00
The PNC Financial Services Group 1 9 8 0 2.39

Dime Community Bancshares presently has a consensus target price of $38.50, suggesting a potential upside of 19.34%. The PNC Financial Services Group has a consensus target price of $219.44, suggesting a potential upside of 31.70%. Given The PNC Financial Services Group’s higher possible upside, analysts clearly believe The PNC Financial Services Group is more favorable than Dime Community Bancshares.

Dividends

Dime Community Bancshares pays an annual dividend of $0.96 per share and has a dividend yield of 3.0%. The PNC Financial Services Group pays an annual dividend of $6.00 per share and has a dividend yield of 3.6%. Dime Community Bancshares pays out 25.7% 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. Dime Community Bancshares has raised its dividend for 1 consecutive years and The PNC Financial Services Group has raised its dividend for 12 consecutive years. The PNC Financial Services Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dime Community Bancshares $426.69 million 2.98 $104.00 million $3.73 8.65
The PNC Financial Services Group $19.70 billion 3.54 $5.67 billion $11.82 14.10

The PNC Financial Services Group has higher revenue and earnings than Dime Community Bancshares. Dime Community Bancshares 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.

Risk & Volatility

Dime Community Bancshares has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, The PNC Financial Services Group has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Dime Community Bancshares 35.58% 14.40% 1.25%
The PNC Financial Services Group 26.14% 12.43% 1.22%

Summary

The PNC Financial Services Group beats Dime Community Bancshares on 11 of the 17 factors compared between the two stocks.

Dime Community Bancshares Company Profile (Get Rating)

Dime Community Bancshares, Inc. operates as the holding company for Dime Community Bank that provides various commercial banking and financial services. It accepts time, savings, and demand deposits from the businesses, consumers, and local municipalities. The company also offers commercial real estate loans; multi-family mortgage loans; residential mortgage loans; secured and unsecured commercial and consumer loans; home equity loans; and construction and land loans. In addition, it invests in Federal Home Loan Bank, Federal National Mortgage Association, Government National Mortgage Association, and Federal Home Loan Mortgage Corporation mortgage-backed securities, collateralized mortgage obligations, and other asset backed securities; U.S. Treasury securities; New York state and local municipal obligations; U.S. government-sponsored enterprise securities; and corporate bonds. Further, the company offers certificate of deposit account registry services and insured cash sweep programs; merchant credit and debit card processing, automated teller machines, cash management services, lockbox processing, online banking services, remote deposit capture, safe deposit boxes, and individual retirement accounts; investment products and services through a third-party broker dealer; and title insurance broker services. As of December 31, 2021, it operated 60 branch locations throughout Long Island and the New York City boroughs of Brooklyn, Queens, Manhattan, and the Bronx. Dime Community Bancshares, Inc. was founded in 1910 and is headquartered in Hauppauge, 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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