Head-To-Head Review: The PNC Financial Services Group (NYSE:PNC) and Sound Financial Bancorp (NASDAQ:SFBC)

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Sound Financial Bancorp and The PNC Financial Services Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sound Financial Bancorp	0	0	1	0	3.00
The PNC Financial Services Group	0	4	16	1	2.86

The PNC Financial Services Group has a consensus target price of $267.87, indicating a potential upside of 19.77%. Given The PNC Financial Services Group’s higher probable upside, analysts clearly believe The PNC Financial Services Group is more favorable than Sound Financial Bancorp.

Volatility & Risk

Sound Financial Bancorp has a beta of 0.01, meaning that its share price is 99% less volatile than the S&P 500. Comparatively, The PNC Financial Services Group has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sound Financial Bancorp	12.89%	7.31%	0.74%
The PNC Financial Services Group	21.41%	12.48%	1.31%

Valuation & Earnings

This table compares Sound Financial Bancorp and The PNC Financial Services Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sound Financial Bancorp	$40.28 million	2.90	$7.16 million	$3.12	14.60
The PNC Financial Services Group	$34.00 billion	2.62	$6.94 billion	$18.17	12.31

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

Dividends

Sound Financial Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 1.8%. The PNC Financial Services Group pays an annual dividend of $8.00 per share and has a dividend yield of 3.6%. Sound Financial Bancorp pays out 26.9% of its earnings in the form of a dividend. The PNC Financial Services Group pays out 44.0% 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. Sound Financial Bancorp has increased its dividend for 2 consecutive years and 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.

Institutional & Insider Ownership

68.8% of Sound Financial Bancorp shares are held by institutional investors. Comparatively, 83.5% of The PNC Financial Services Group shares are held by institutional investors. 12.3% of Sound Financial Bancorp 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, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

The PNC Financial Services Group beats Sound Financial Bancorp on 13 of the 18 factors compared between the two stocks.

About Sound Financial Bancorp

Sound Financial Bancorp, Inc. operates as the bank holding company for Sound Community Bank that provides banking and other financial services for consumers and businesses. It accepts various deposits products comprising savings, money market deposit, NOW, and demand accounts, as well as certificates of deposit. The company also offers loans secured by first and second mortgages on one-to four-family residences; home equity loans, including fixed-rate loans and variable-rate lines of credit; commercial and multifamily real estate loans; construction loans secured by single-family residences, and commercial and multifamily real estate; land loans; commercial business loans to finance commercial vehicles and equipment, as well as loans secured by accounts receivable and/or inventory; and secured and unsecured consumer loans, such as new and used manufactured homes, floating homes, automobiles, boats, and recreational vehicle loans, and loans secured by deposit accounts. The company was founded in 1953 and is headquartered in Seattle, Washington.

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.