Critical Analysis: Svenska Handelsbanken AB (publ) (OTCMKTS:SVNLY) and The PNC Financial Services Group (NYSE:PNC)

The PNC Financial Services Group (NYSE:PNC) and Svenska Handelsbanken AB (publ) (OTCMKTS:SVNLY) are both large-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, earnings, dividends, institutional ownership, profitability, analyst recommendations and risk.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for The PNC Financial Services Group and Svenska Handelsbanken AB (publ), as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The PNC Financial Services Group	2	6	9	1	2.50
Svenska Handelsbanken AB (publ)	1	2	0	0	1.67

The PNC Financial Services Group presently has a consensus price target of $200.88, indicating a potential upside of 20.69%. Given The PNC Financial Services Group’s stronger consensus rating and higher possible upside, analysts plainly believe The PNC Financial Services Group is more favorable than Svenska Handelsbanken AB (publ).

Dividends

The PNC Financial Services Group pays an annual dividend of $6.40 per share and has a dividend yield of 3.8%. Svenska Handelsbanken AB (publ) pays an annual dividend of $0.59 per share and has a dividend yield of 9.1%. The PNC Financial Services Group pays out 45.2% of its earnings in the form of a dividend. Svenska Handelsbanken AB (publ) pays out 92.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. The PNC Financial Services Group has raised its dividend for 14 consecutive years.

Risk & Volatility

The PNC Financial Services Group has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500. Comparatively, Svenska Handelsbanken AB (publ) has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500.

Valuation and Earnings

This table compares The PNC Financial Services Group and Svenska Handelsbanken AB (publ)”s gross 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	$21.11 billion	3.12	$5.89 billion	$14.16	11.75
Svenska Handelsbanken AB (publ)	$17.44 billion	1.47	$2.60 billion	$0.64	10.09

The PNC Financial Services Group has higher revenue and earnings than Svenska Handelsbanken AB (publ). Svenska Handelsbanken AB (publ) 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.

Profitability

This table compares The PNC Financial Services Group and Svenska Handelsbanken AB (publ)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The PNC Financial Services Group	17.10%	11.12%	1.06%
Svenska Handelsbanken AB (publ)	14.89%	13.62%	0.73%

Institutional and Insider Ownership

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

Summary

The PNC Financial Services Group beats Svenska Handelsbanken AB (publ) on 16 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 Svenska Handelsbanken AB (publ)

Svenska Handelsbanken AB (publ) provides various banking products and services for private and corporate customers primarily in Sweden, the United Kingdom, Norway, the Netherlands, the United States, Luxembourg, Finland, and Poland. The company offers savings, transactions, business, currency, and investment accounts, as well as accounts for cash pool, and forestry and agriculture; mortgage and committed loans, and private loans; mutual funds; pension products; credit and debit cards; and payment and reconciliation services, as well as foreign exchange rate services. It also provides financing for investments, such as equipment, cars, computers, and other inventories, as well as vehicle and real estate financing services; green loans and advisor services; investment and other financing services; medical care, and group and health insurance products; forestry and farming banking products; and online and mobile banking services, as well as various banking services for children and young people. In addition, the company offers financial services, that includes asset management, transactional banking, corporate finance, financing, markets, trade finance, market information and research services to large corporations; cash management solutions; and various corporate banking services to small and medium-sized companies and large corporates, as well as private banking services. Svenska Handelsbanken AB (publ) was incorporated in 1871 and is headquartered in Stockholm, Sweden.