Wintrust Financial Corporation (NASDAQ: WTFC) and Synovus Financial Corp. (NYSE:SNV) are both mid-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.
Risk and Volatility
Wintrust Financial Corporation has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500. Comparatively, Synovus Financial Corp. has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500.
Wintrust Financial Corporation pays an annual dividend of $0.56 per share and has a dividend yield of 0.8%. Synovus Financial Corp. pays an annual dividend of $0.60 per share and has a dividend yield of 1.4%. Wintrust Financial Corporation pays out 14.1% of its earnings in the form of a dividend. Synovus Financial Corp. pays out 27.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Wintrust Financial Corporation has raised its dividend for 3 consecutive years.
This is a breakdown of current recommendations and price targets for Wintrust Financial Corporation and Synovus Financial Corp., as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Wintrust Financial Corporation||0||5||2||0||2.29|
|Synovus Financial Corp.||0||8||4||0||2.33|
Wintrust Financial Corporation currently has a consensus price target of $78.67, suggesting a potential upside of 8.97%. Synovus Financial Corp. has a consensus price target of $43.14, suggesting a potential upside of 2.48%. Given Wintrust Financial Corporation’s higher possible upside, equities analysts plainly believe Wintrust Financial Corporation is more favorable than Synovus Financial Corp..
Earnings and Valuation
This table compares Wintrust Financial Corporation and Synovus Financial Corp.’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Wintrust Financial Corporation||$1.07 billion||3.77||$221.57 million||$3.97||18.18|
|Synovus Financial Corp.||$1.20 billion||4.26||$268.52 million||$2.21||19.05|
Synovus Financial Corp. has higher revenue and earnings than Wintrust Financial Corporation. Wintrust Financial Corporation is trading at a lower price-to-earnings ratio than Synovus Financial Corp., indicating that it is currently the more affordable of the two stocks.
This table compares Wintrust Financial Corporation and Synovus Financial Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Wintrust Financial Corporation||19.24%||9.15%||0.89%|
|Synovus Financial Corp.||20.68%||9.88%||0.92%|
Institutional and Insider Ownership
89.7% of Wintrust Financial Corporation shares are owned by institutional investors. Comparatively, 78.4% of Synovus Financial Corp. shares are owned by institutional investors. 2.0% of Wintrust Financial Corporation shares are owned by insiders. Comparatively, 1.5% of Synovus Financial Corp. shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Synovus Financial Corp. beats Wintrust Financial Corporation on 11 of the 17 factors compared between the two stocks.
About Wintrust Financial Corporation
Wintrust Financial Corporation is a financial holding company. The Company conducts its businesses through three segments: community banking, specialty finance and wealth management. The Company offers community banking services to individuals, small to mid-sized businesses, local governmental units and institutional clients. Through specialty finance segment, the Company offers financing of insurance premiums for businesses and individuals; accounts receivable financing, value-added, out-sourced administrative services, and other specialty finance businesses. The Company offers a range of wealth management services through its subsidiaries, including trust and investment services, asset management and securities brokerage services. The Company offers MaxSafe deposit accounts, which provide customers with expanded Federal Deposit Insurance Corporation (FDIC) insurance coverage by spreading a customer’s deposit across its banks.
About Synovus Financial Corp.
Synovus Financial Corp. is a financial services company and a bank holding company. The Company provides integrated financial services, including commercial and retail banking, financial management, insurance and mortgage services, to its customers through locally branded banking divisions of its subsidiary bank, Synovus Bank (the Bank), and other offices in Georgia, Alabama, South Carolina, Florida and Tennessee. The Bank offers commercial banking services and retail banking services. The Bank’s commercial banking services include cash management, asset management, capital markets services, institutional trust services, and commercial, financial and real estate loans. Its retail banking services include mortgage, installment and other retail loans; investment and brokerage services; safe deposit services; automated banking services; automated fund transfers; Internet-based banking services, and bank credit card services, including MasterCard and Visa services.
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