Head-To-Head Survey: Synchrony Financial (SYF) & Its Rivals

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

Valuation & Earnings

This table compares Synchrony Financial and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Synchrony Financial $7.04 billion N/A 10.95
Synchrony Financial Competitors $564.84 million $92.07 million 15.73

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

Dividends

Synchrony Financial pays an annual dividend of $0.60 per share and has a dividend yield of 2.1%. 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 peers, given its higher yield and lower payout ratio.

Risk and Volatility

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

Profitability

This table compares Synchrony Financial and its peers’ 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 -28.26% -17.28% 0.63%

Insider and Institutional Ownership

87.2% of Synchrony Financial shares are owned by institutional investors. Comparatively, 77.6% of shares of all “Consumer Lending” companies are owned by institutional investors. 0.0% of Synchrony Financial shares are owned by insiders. Comparatively, 15.2% of shares of all “Consumer Lending” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Synchrony Financial and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Synchrony Financial 0 8 15 0 2.65
Synchrony Financial Competitors 192 744 1066 58 2.48

Synchrony Financial presently has a consensus target price of $37.08, indicating a potential upside of 27.76%. As a group, “Consumer Lending” companies have a potential upside of 59.18%. Given Synchrony Financial’s peers higher probable upside, analysts plainly believe Synchrony Financial has less favorable growth aspects than its peers.

Summary

Synchrony Financial beats its peers 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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