Synchrony Financial (NYSE: SYF) and PHH Corp (NYSE:PHH) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, dividends, profitability, valuation, institutional ownership and earnings.

Dividends

Synchrony Financial pays an annual dividend of $0.60 per share and has a dividend yield of 2.1%. PHH Corp does not pay a dividend. Synchrony Financial pays out 22.6% of its earnings in the form of a dividend.

Volatility and Risk

Synchrony Financial has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, PHH Corp has a beta of 1.92, indicating that its stock price is 92% more volatile than the S&P 500.

Institutional & Insider Ownership

87.2% of Synchrony Financial shares are held by institutional investors. Comparatively, 98.1% of PHH Corp shares are held by institutional investors. 0.0% of Synchrony Financial shares are held by insiders. Comparatively, 2.5% of PHH Corp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Synchrony Financial and PHH Corp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Synchrony Financial $7.04 billion 3.23 $2.11 billion $2.65 10.77
PHH Corp $734.00 million 0.99 -$261.66 million ($5.10) -2.78

Synchrony Financial has higher revenue and earnings than PHH Corp. PHH Corp is trading at a lower price-to-earnings ratio than Synchrony Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Synchrony Financial and PHH Corp’s 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%
PHH Corp -55.15% -20.67% -7.37%

Analyst Recommendations

This is a summary of current ratings and target prices for Synchrony Financial and PHH Corp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Synchrony Financial 0 8 15 0 2.65
PHH Corp 0 1 1 0 2.50

Synchrony Financial currently has a consensus target price of $37.08, suggesting a potential upside of 29.86%. PHH Corp has a consensus target price of $16.25, suggesting a potential upside of 14.44%. Given Synchrony Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Synchrony Financial is more favorable than PHH Corp.

Summary

Synchrony Financial beats PHH Corp on 11 of the 15 factors compared between the two stocks.

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.

PHH Corp Company Profile

PHH Corporation is a standalone mortgage company. The Company provides outsourced mortgage banking services to a range of clients, including financial institutions and real estate brokers throughout the United States, and is focused on originating, selling, servicing and subservicing residential mortgage loans through its subsidiary, PHH Mortgage Corporation and its subsidiaries. It operates through two segments: Mortgage Production and Mortgage Servicing. The Mortgage Production segment provides mortgage loan origination services and sells mortgage loans. The Mortgage Servicing segment performs servicing activities for loans originated by the Company and mortgage servicing rights purchased from others, and acts as a subservicer for certain clients that own the underlying mortgage servicing rights. The Mortgage Production segment provides private label mortgage services to financial institutions and real estate brokers, and sources mortgage loans through its retail platform.

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