Investar (NASDAQ:ISTR) & The PNC Financial Services Group (NYSE:PNC) Critical Contrast

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

Valuation and Earnings

This table compares The PNC Financial Services Group and Investar”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	$34.00 billion	2.65	$6.94 billion	$18.17	12.42
Investar	$119.80 million	3.40	$22.90 million	$2.43	12.16

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

Dividends

The PNC Financial Services Group pays an annual dividend of $8.00 per share and has a dividend yield of 3.5%. Investar pays an annual dividend of $0.48 per share and has a dividend yield of 1.6%. The PNC Financial Services Group pays out 44.0% of its earnings in the form of a dividend. Investar pays out 19.8% 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. The PNC Financial Services Group has increased its dividend for 14 consecutive years and Investar has increased its dividend for 10 consecutive years. The PNC Financial Services Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
The PNC Financial Services Group	21.41%	12.48%	1.31%
Investar	17.55%	11.65%	1.14%

Institutional & Insider Ownership

83.5% of The PNC Financial Services Group shares are owned by institutional investors. Comparatively, 50.2% of Investar shares are owned by institutional investors. 0.4% of The PNC Financial Services Group shares are owned by company insiders. Comparatively, 10.6% of Investar shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for The PNC Financial Services Group and Investar, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The PNC Financial Services Group	0	4	16	1	2.86
Investar	0	2	1	0	2.33

The PNC Financial Services Group currently has a consensus price target of $267.87, indicating a potential upside of 18.72%. Investar has a consensus price target of $31.50, indicating a potential upside of 6.58%. Given The PNC Financial Services Group’s stronger consensus rating and higher probable upside, equities research analysts plainly believe The PNC Financial Services Group is more favorable than Investar.

Risk & Volatility

The PNC Financial Services Group has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500. Comparatively, Investar has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500.

Summary

The PNC Financial Services Group beats Investar on 15 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 Investar

Investar Holding Corporation operates as the bank holding company for Investar Bank that provides a range of commercial banking products to individuals, professionals, and small to medium-sized businesses in south Louisiana, southeast Texas, and Alabama in the United States. The company offers various deposit products and services, such as savings, checking, money market, and individual retirement accounts, as well as various certificates of deposit; debit and credit cards; internet, mobile, and video banking services; and reciprocal deposit products. It also provides commercial real estate loans; commercial and industrial loans, including working capital lines of credit and equipment loans; loans for the construction of commercial projects, and single family residential and multifamily properties; one-to-four family residential real estate loans, such as second mortgage loans; and consumer loans, such as secured and unsecured installment and term loans, home equity loans and lines of credit, and auto loans, as well as loans for personal, family, and household purposes. In addition, the company offers treasury management products, including remote deposit capture, lockbox payment processing, virtual vault, positive pay, ACH origination, wire transfer, investment sweep accounts, and business internet banking services. Further, it provides various other banking services, such as cashiers' checks, direct deposit of payroll and social security checks, night depository, bank-by-mail, automated teller machines, electronic statements, interactive teller machines, online account opening, and mobile wallet payment services. Investar Holding Corporation was founded in 2006 and is headquartered in Baton Rouge, Louisiana.