Contrasting Synchrony Financial (SYF) & Its Rivals

Synchrony Financial (NYSE: SYF) is one of 27 public companies in the “Consumer Lending” industry, but how does it weigh in compared to its rivals? We will compare Synchrony Financial to related companies based on the strength of its earnings, valuation, profitability, risk, dividends, institutional ownership and analyst recommendations.

Earnings and Valuation

This table compares Synchrony Financial and its rivals top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Synchrony Financial $7.04 billion N/A 11.12
Synchrony Financial Competitors $564.84 million $92.07 million 16.62

Synchrony Financial has higher revenue, but lower earnings than its rivals. Synchrony Financial is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Synchrony Financial and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Synchrony Financial 13.84% 15.30% 2.43%
Synchrony Financial Competitors -28.29% -17.48% 0.47%

Analyst Ratings

This is a summary of current ratings for Synchrony Financial and its rivals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Synchrony Financial 0 8 13 0 2.62
Synchrony Financial Competitors 192 747 1068 58 2.48

Synchrony Financial presently has a consensus target price of $37.25, indicating a potential upside of 26.40%. As a group, “Consumer Lending” companies have a potential upside of 59.79%. Given Synchrony Financial’s rivals higher probable upside, analysts plainly believe Synchrony Financial has less favorable growth aspects than its rivals.

Institutional & Insider Ownership

87.1% of Synchrony Financial shares are held by institutional investors. Comparatively, 77.5% of shares of all “Consumer Lending” companies are held by institutional investors. 0.0% of Synchrony Financial shares are held by insiders. Comparatively, 15.2% of shares of all “Consumer Lending” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Synchrony Financial has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, Synchrony Financial’s rivals have a beta of 1.48, suggesting that their average stock price is 48% more volatile than the S&P 500.

Dividends

Synchrony Financial pays an annual dividend of $0.60 per share and has a dividend yield of 2.0%. Synchrony Financial pays out 22.6% of its earnings in the form of a dividend. As a group, “Consumer Lending” companies pay a dividend yield of 1.7% and pay out 25.6% of their earnings in the form of a dividend. Synchrony Financial is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Summary

Synchrony Financial beats its rivals on 9 of the 14 factors compared.

About Synchrony Financial

Synchrony Financial is a consumer financial services company. The Company provides a range of credit products through programs it has established with a group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers. The Company’s revenue activities are managed through three sales platforms: Retail Card, Payment Solutions and CareCredit. It offers its credit products through its subsidiary, Synchrony Bank (the Bank). Through the Bank, it offers a range of deposit products insured by the Federal Deposit Insurance Corporation (FDIC), including certificates of deposit, individual retirement accounts (IRAs), money market accounts and savings accounts. The Company offers three types of credit products: credit cards, commercial credit products and consumer installment loans. The Company also offers a debt cancellation product. It offers two types of credit cards: private label credit cards and Dual Cards.

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