Analyzing Diamond Hill Investment Group (NASDAQ:DHIL) and The PNC Financial Services Group (NYSE:PNC)

The PNC Financial Services Group (NYSE:PNC) and Diamond Hill Investment Group (NASDAQ:DHIL) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
The PNC Financial Services Group	18.33%	11.07%	1.11%
Diamond Hill Investment Group	31.71%	21.38%	14.72%

Valuation & Earnings

This table compares The PNC Financial Services Group and Diamond Hill Investment Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The PNC Financial Services Group	$34.44 billion	2.31	$5.89 billion	$14.62	13.81
Diamond Hill Investment Group	$151.10 million	2.57	$43.18 million	$17.58	8.09

The PNC Financial Services Group has higher revenue and earnings than Diamond Hill Investment Group. Diamond Hill Investment Group 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

83.5% of The PNC Financial Services Group shares are held by institutional investors. Comparatively, 65.5% of Diamond Hill Investment Group shares are held by institutional investors. 0.4% of The PNC Financial Services Group shares are held by insiders. Comparatively, 4.6% of Diamond Hill Investment Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for The PNC Financial Services Group and Diamond Hill Investment Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The PNC Financial Services Group	1	7	11	1	2.60
Diamond Hill Investment Group	0	0	0	0	0.00

The PNC Financial Services Group presently has a consensus target price of $213.67, indicating a potential upside of 5.83%. Given The PNC Financial Services Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe The PNC Financial Services Group is more favorable than Diamond Hill Investment Group.

Risk and Volatility

The PNC Financial Services Group has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500. Comparatively, Diamond Hill Investment Group has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500.

Dividends

The PNC Financial Services Group pays an annual dividend of $6.80 per share and has a dividend yield of 3.4%. Diamond Hill Investment Group pays an annual dividend of $6.00 per share and has a dividend yield of 4.2%. The PNC Financial Services Group pays out 46.5% of its earnings in the form of a dividend. Diamond Hill Investment Group pays out 34.1% 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. Diamond Hill Investment Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

The PNC Financial Services Group beats Diamond Hill Investment Group on 10 of the 18 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 Diamond Hill Investment Group

Diamond Hill Investment Group, Inc., through its subsidiary, Diamond Hill Capital Management, Inc., provides investment advisory and fund administration services in the United States. It offers investment advisory and related services to clients through pooled vehicles, such as private fund; separately managed accounts; collective investment trusts; and other pooled vehicles, including sub-advised funds and model delivery programs. The company also provides fund administration services comprising portfolio and regulatory compliance, treasury and financial oversight, and general business management and governance of the funds, as well as oversight of back-office service providers, which include the custodian, fund accountant, and transfer agent. Diamond Hill Investment Group, Inc. was incorporated in 1990 and is based in Columbus, Ohio.