Analyzing The PNC Financial Services Group (NYSE:PNC) and MarketAxess (NASDAQ:MKTX)

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

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MarketAxess	0	7	3	0	2.30
The PNC Financial Services Group	0	6	14	1	2.76

MarketAxess currently has a consensus target price of $201.11, indicating a potential upside of 35.12%. The PNC Financial Services Group has a consensus target price of $241.72, indicating a potential upside of 8.60%. Given MarketAxess’ higher possible upside, equities analysts clearly believe MarketAxess is more favorable than The PNC Financial Services Group.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
MarketAxess	29.14%	20.88%	14.07%
The PNC Financial Services Group	20.89%	12.10%	1.27%

Risk & Volatility

MarketAxess has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, The PNC Financial Services Group has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500.

Earnings and Valuation

This table compares MarketAxess and The PNC Financial Services Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MarketAxess	$846.27 million	6.19	$246.63 million	$6.66	22.35
The PNC Financial Services Group	$34.00 billion	2.64	$6.94 billion	$17.21	12.93

The PNC Financial Services Group has higher revenue and earnings than MarketAxess. The PNC Financial Services Group is trading at a lower price-to-earnings ratio than MarketAxess, indicating that it is currently the more affordable of the two stocks.

Dividends

MarketAxess pays an annual dividend of $3.12 per share and has a dividend yield of 2.1%. The PNC Financial Services Group pays an annual dividend of $6.80 per share and has a dividend yield of 3.1%. MarketAxess pays out 46.8% of its earnings in the form of a dividend. The PNC Financial Services Group pays out 39.5% 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. MarketAxess has raised its dividend for 2 consecutive years and The PNC Financial Services Group has raised 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.

Insider & Institutional Ownership

99.0% of MarketAxess shares are held by institutional investors. Comparatively, 83.5% of The PNC Financial Services Group shares are held by institutional investors. 2.7% of MarketAxess 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 large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

The PNC Financial Services Group beats MarketAxess on 10 of the 18 factors compared between the two stocks.

About MarketAxess

MarketAxess Holdings Inc., together with its subsidiaries, operates an electronic trading platform for institutional investor and broker-dealer companies worldwide. The company offers trading technology that provides liquidity access in U.S. high-grade bonds, U.S. high-yield bonds, emerging market debt, eurobonds, municipal bonds, U.S. government bonds, and other fixed-income securities; and executes bond trades between and among institutional investor and broker-dealer clients in an all-to-all anonymous trading environment for corporate bonds through its Open Trading protocols. It also provides trading-related products and services, including composite+ pricing and other market data products to assist clients with trading decisions; auto-execution and other execution services for clients requiring specialized workflow solutions; connectivity solutions that facilitate straight-through processing; and technology services to optimize trading environments. In addition, the company offers various pre-and post-trade services, such as trade matching, trade publication, regulatory transaction reporting, and market and reference data across a range of fixed-income and other products. MarketAxess Holdings Inc. was incorporated in 2000 and is headquartered in New York, New York.

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.