Contrasting The PNC Financial Services Group (NYSE:PNC) and International Bancshares (NASDAQ:IBOC)

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

Risk & Volatility

International Bancshares has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500. Comparatively, The PNC Financial Services Group has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Dividends

International Bancshares pays an annual dividend of $1.46 per share and has a dividend yield of 2.2%. The PNC Financial Services Group pays an annual dividend of $8.00 per share and has a dividend yield of 3.6%. International Bancshares pays out 22.0% of its earnings in the form of a dividend. The PNC Financial Services Group pays out 42.6% 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. International Bancshares has raised its dividend for 16 consecutive years and The PNC Financial Services Group has raised its dividend for 14 consecutive years.

Profitability

This table compares International 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
International Bancshares	38.83%	12.67%	2.47%
The PNC Financial Services Group	21.83%	12.82%	1.33%

Analyst Ratings

This is a summary of recent ratings and recommmendations for International Bancshares and The PNC Financial Services Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
International Bancshares	0	0	1	0	3.00
The PNC Financial Services Group	0	7	17	0	2.71

International Bancshares currently has a consensus price target of $85.00, indicating a potential upside of 26.56%. The PNC Financial Services Group has a consensus price target of $266.13, indicating a potential upside of 18.55%. Given International Bancshares’ stronger consensus rating and higher possible upside, equities research analysts clearly believe International Bancshares is more favorable than The PNC Financial Services Group.

Earnings & Valuation

This table compares International Bancshares 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
International Bancshares	$1.06 billion	3.96	$412.29 million	$6.63	10.13
The PNC Financial Services Group	$34.00 billion	2.63	$6.94 billion	$18.79	11.95

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

Institutional and Insider Ownership

65.9% of International Bancshares shares are held by institutional investors. Comparatively, 83.5% of The PNC Financial Services Group shares are held by institutional investors. 13.1% of International Bancshares shares are held by company insiders. Comparatively, 0.4% of The PNC Financial Services Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

The PNC Financial Services Group beats International Bancshares on 9 of the 17 factors compared between the two stocks.

About International Bancshares

International Bancshares Corporation, a financial holding company, provides commercial and retail banking services in Texas and the State of Oklahoma. It accepts checking and saving deposits; and offers commercial, real estate, personal, home improvement, automobile, and other installment and term loans. The company also provides international banking services, including letters of credit, commercial and industrial loans, and foreign exchange services. In addition, it offers other banking related services, such as credit cards, safety deposit boxes, collection, notary public, escrow, drive up and walk up facilities, and other customary banking services; and Internet banking services, as well as securities products through third party providers. The company was founded in 1966 and is headquartered in Laredo, Texas.

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.