Cash America International (NYSE: CSH) and Synchrony Financial (NYSE:SYF) are both financials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.
This is a breakdown of current recommendations for Cash America International and Synchrony Financial, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cash America International||0||0||1||0||3.00|
Cash America International presently has a consensus price target of $57.00, suggesting a potential upside of 35.07%. Synchrony Financial has a consensus price target of $36.37, suggesting a potential upside of 18.70%. Given Cash America International’s stronger consensus rating and higher possible upside, analysts clearly believe Cash America International is more favorable than Synchrony Financial.
Risk and Volatility
Cash America International has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Synchrony Financial has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.
Earnings and Valuation
This table compares Cash America International and Synchrony Financial’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Cash America International||N/A||N/A||N/A||$1.18||35.76|
|Synchrony Financial||$7.04 billion||3.46||$2.11 billion||$2.65||11.56|
Synchrony Financial has higher revenue and earnings than Cash America International. Synchrony Financial is trading at a lower price-to-earnings ratio than Cash America International, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
87.1% of Synchrony Financial shares are held by institutional investors. 0.0% of Synchrony Financial shares are held 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.
Cash America International pays an annual dividend of $0.32 per share and has a dividend yield of 0.8%. Synchrony Financial pays an annual dividend of $0.60 per share and has a dividend yield of 2.0%. Cash America International pays out 27.1% of its earnings in the form of a dividend. Synchrony Financial pays out 22.6% 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. Synchrony Financial has raised its dividend for 2 consecutive years. Synchrony Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Cash America International and Synchrony Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Cash America International||0.87%||0.86%||0.64%|
Synchrony Financial beats Cash America International on 12 of the 14 factors compared between the two stocks.
About Cash America International
Cash America International, Inc. provides specialty financial services to individuals through its storefront lending and franchised check cashing locations. The Company offers secured non-recourse loans, referred to as pawn loans, as its primary line of business. The Company is also engaged in originating, arranging, guaranteeing or purchasing consumer loans in some of its locations. The Company also offers check cashing and other ancillary products and services, including money orders, wire transfers and auto insurance. The Company’s franchised check cashing business offers check cashing services through its franchised check cashing centers. The Company provides its services in the United States under the names Cash America Pawn, SuperPawn, Cash America Payday Advance, Cashland and Mr. Payroll. The Company is engaged in pawn lending activities, merchandise disposition activities, consumer loan activities and check cashing and other financial services.
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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