Critical Comparison: Old National Bancorp (NASDAQ:ONB) & The PNC Financial Services Group (NYSE:PNC)

The PNC Financial Services Group (NYSE:PNC) and Old National Bancorp (NASDAQ:ONB) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.

Insider and Institutional Ownership

83.5% of The PNC Financial Services Group shares are held by institutional investors. Comparatively, 83.7% of Old National Bancorp shares are held by institutional investors. 0.4% of The PNC Financial Services Group shares are held by insiders. Comparatively, 0.7% of Old National Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

The PNC Financial Services Group has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, Old National Bancorp has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
The PNC Financial Services Group	21.83%	12.82%	1.33%
Old National Bancorp	23.36%	12.02%	1.35%

Dividends

The PNC Financial Services Group pays an annual dividend of $8.00 per share and has a dividend yield of 3.5%. Old National Bancorp pays an annual dividend of $0.58 per share and has a dividend yield of 2.2%. The PNC Financial Services Group pays out 42.6% of its earnings in the form of a dividend. Old National Bancorp pays out 23.7% 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 increased its dividend for 14 consecutive years. The PNC Financial Services Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares The PNC Financial Services Group and Old National Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The PNC Financial Services Group	$34.00 billion	2.72	$6.94 billion	$18.79	12.34
Old National Bancorp	$3.74 billion	2.62	$669.26 million	$2.45	10.57

The PNC Financial Services Group has higher revenue and earnings than Old National Bancorp. Old National Bancorp 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.

Analyst Ratings

This is a breakdown of current recommendations and price targets for The PNC Financial Services Group and Old National Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The PNC Financial Services Group	0	8	17	0	2.68
Old National Bancorp	0	2	12	0	2.86

The PNC Financial Services Group currently has a consensus target price of $266.04, indicating a potential upside of 14.74%. Old National Bancorp has a consensus target price of $29.64, indicating a potential upside of 14.43%. Given The PNC Financial Services Group’s higher probable upside, research analysts plainly believe The PNC Financial Services Group is more favorable than Old National Bancorp.

Summary

The PNC Financial Services Group beats Old National Bancorp on 11 of the 17 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 Old National Bancorp

Old National Bancorp operates as the bank holding company for Old National Bank that provides various financial services to individual and commercial customers in the United States. It accepts deposit accounts, including noninterest-bearing demand, interest-bearing checking, negotiable order of withdrawal, savings and money market, and time deposits; and offers loans, such as home equity lines of credit, residential real estate loans, consumer loans, commercial loans, commercial real estate loans, agricultural loans, letters of credit, and lease financing. The company also provides debit and automated teller machine cards, telephone access, online banking, and other electronic and mobile banking services; cash management, private banking, brokerage, trust, investment advisory, and other traditional banking services; wealth management, investment, and foreign currency services; and treasury management, merchant, and capital markets services, as well as community development lending and equity investment solutions. The company was founded in 1834 and is headquartered in Evansville, Indiana.