Funding Circle (OTCMKTS:FDCHF) and Synchrony Financial (NYSE:SYF) Critical Survey

Funding Circle (OTCMKTS:FDCHF) and Synchrony Financial (NYSE:SYF) are both financial services companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Profitability

This table compares Funding Circle and Synchrony Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Funding Circle	N/A	N/A	N/A
Synchrony Financial	10.68%	17.37%	1.99%

Insider and Institutional Ownership

96.5% of Synchrony Financial shares are held by institutional investors. 0.7% of Synchrony Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings for Funding Circle and Synchrony Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Funding Circle	0	0	0	0	N/A
Synchrony Financial	1	10	7	0	2.33

Synchrony Financial has a consensus target price of $39.24, suggesting a potential downside of 9.01%. Given Synchrony Financial’s higher probable upside, analysts clearly believe Synchrony Financial is more favorable than Funding Circle.

Valuation & Earnings

This table compares Funding Circle and Synchrony Financial’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Funding Circle	N/A	N/A	N/A	N/A	N/A
Synchrony Financial	$20.71 billion	0.85	$2.24 billion	$5.18	8.32

Synchrony Financial has higher revenue and earnings than Funding Circle.

Summary

Synchrony Financial beats Funding Circle on 8 of the 8 factors compared between the two stocks.

About Funding Circle

Funding Circle Holdings plc, together with its subsidiaries, provides online lending platforms in the United Kingdom, the United States, and internationally. The company offers small business loans, recovery loan schemes, and business finance solutions to small and medium enterprises. It also provides flexipay and flexipay card solutions. The company acts as a special purpose bankruptcy remote entity that issues loan payment dependent debt securities to accredited investors. The company was incorporated in 2010 and is based in London, the United Kingdom.

About Synchrony Financial

Synchrony Financial, together with its subsidiaries, operates as a consumer financial services company in the United States. It provides credit products, such as credit cards, commercial credit products, and consumer installment loans. The company also offers private label credit cards, dual co-brand and general purpose credit cards, short- and long-term installment loans, and consumer banking products; and deposit products, including certificates of deposit, individual retirement accounts, money market accounts, and savings accounts, and sweep and affinity deposits, as well as accepts deposits through third-party securities brokerage firms. In addition, it provides debt cancellation products to its credit card customers through online, mobile, and direct mail; and healthcare payments and financing solutions under the CareCredit and Walgreens brands; payments and financing solutions in the apparel, specialty retail, outdoor, music, and luxury industries, such as American Eagle, Dick's Sporting Goods, Guitar Center, Kawasaki, Pandora, Polaris, Suzuki, and Sweetwater. The company offers its credit products through programs established with a group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations, and healthcare service providers; and deposit products through various channels, such as digital and print. It serves digital, health and wellness, retail, home, auto, telecommunications, jewelry, pets, and other industries. The company was founded in 1932 and is headquartered in Stamford, Connecticut.