By Rob Otman
PNC (NYSE: PNC) is a $62 billion company today. Investors that bought shares one year ago are sitting on a 63.54% total return. That’s above the S&P 500’s return of 18.93%.
PNC stock is beating the market, and it reports earnings next week. But does that make it a good buy today? To answer this question, we’ve turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
[iu-adbox]
✗ Earnings-per-Share (EPS) Growth: PNC reported a recent EPS growth rate of 17.06%. That’s below the banking industry average of 208.14%. That’s not a good sign. We like to see companies that have higher earnings growth.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the banking industry is 29.72. And PNC’s ratio comes in at 16.7. It’s trading at a better value than many of its competitors.
✓ Debt-to-Equity: The debt-to-equity ratio for PNC stock is 119.95%. That’s below the banking industry average of 327.02%. The company is less leveraged.
✓ Free Cash Flow per Share Growth: PNC’s FCF has been higher than that of its competitors over the last year. That’s good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.
✓ Profit Margins: The profit margin of PNC comes in at 27.21% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. PNC’s profit margin is above the banking average of 25.48%. So that’s a positive indicator for investors.
✗ Return on Equity: Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for PNC is 8.7%, and that’s below its industry average ROE of 11.77%.
PNC stock passes four of our six key metrics today. That’s why our Investment U Stock Grader rates it as a Buy With Caution.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.
If you’re interested in finding Strong Buy stocks yourself, check out Fundamental Analysis Pro. It’s a free five-part mini-course that will teach you how to grade stocks like a Wall Street veteran. Click here to learn more. …read more
Source:: Investment You
The post Should You Buy PNC Stock Before Earnings? appeared first on Junior Mining Analyst.