Synchrony Financial (SYF) & Its Competitors Critical Survey

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

Insider & Institutional Ownership

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

Profitability

This table compares Synchrony Financial and its competitors’ 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%

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 competitors, given its higher yield and lower payout ratio.

Volatility and Risk

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

Analyst Recommendations

This is a breakdown of recent ratings for Synchrony Financial and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Synchrony Financial 0 8 15 0 2.65
Synchrony Financial Competitors 192 746 1066 58 2.48

Synchrony Financial presently has a consensus target price of $37.08, suggesting a potential upside of 27.84%. As a group, “Consumer Lending” companies have a potential upside of 58.70%. Given Synchrony Financial’s competitors higher possible upside, analysts plainly believe Synchrony Financial has less favorable growth aspects than its competitors.

Valuation & Earnings

This table compares Synchrony Financial and its competitors gross revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Synchrony Financial $7.04 billion N/A 10.94
Synchrony Financial Competitors $564.84 million $92.07 million 16.52

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

Summary

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

Synchrony Financial Company Profile

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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