Reviewing East West Bancorp (EWBC) & Synovus Financial (SNV)
East West Bancorp (NASDAQ: EWBC) and Synovus Financial (NYSE:SNV) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, dividends, valuation, earnings and profitability.
This is a summary of recent ratings and recommmendations for East West Bancorp and Synovus Financial, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|East West Bancorp||1||6||4||0||2.27|
Risk & Volatility
East West Bancorp has a beta of 1.46, meaning that its share price is 46% more volatile than the S&P 500. Comparatively, Synovus Financial has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500.
Valuation and Earnings
This table compares East West Bancorp and Synovus Financial’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|East West Bancorp||$1.32 billion||6.67||$431.67 million||$3.64||16.75|
|Synovus Financial||$1.30 billion||4.48||$246.78 million||$2.48||19.60|
East West Bancorp has higher revenue and earnings than Synovus Financial. East West Bancorp is trading at a lower price-to-earnings ratio than Synovus Financial, indicating that it is currently the more affordable of the two stocks.
East West Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 1.3%. Synovus Financial pays an annual dividend of $0.60 per share and has a dividend yield of 1.2%. East West Bancorp pays out 22.0% of its earnings in the form of a dividend. Synovus Financial pays out 24.2% 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. East West Bancorp has increased its dividend for 3 consecutive years. East West Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares East West Bancorp and Synovus Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|East West Bancorp||34.75%||13.51%||1.37%|
Insider and Institutional Ownership
91.4% of East West Bancorp shares are owned by institutional investors. Comparatively, 77.8% of Synovus Financial shares are owned by institutional investors. 0.9% of East West Bancorp shares are owned by company insiders. Comparatively, 1.5% of Synovus Financial shares are owned by company 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.
East West Bancorp beats Synovus Financial on 13 of the 17 factors compared between the two stocks.
About East West Bancorp
East West Bancorp, Inc. is a bank holding company. The Company’s principal business is to serve as a holding company for East West Bank (the Bank) and other banking or banking-related subsidiaries. The Bank is a California state-chartered bank, which operates in the United States and Greater China. The Bank provides a range of personal and commercial banking services to businesses, business executives, professionals, and other individuals. It operates through three segments: Retail Banking, Commercial Banking and Other. The Retail Banking segment focuses primarily on retail operations through the Bank’s branch network. The Commercial Banking segment primarily generates commercial and industrial (C&I) loans and commercial real estate (CRE) loans through the domestic commercial lending operations in California, New York, Texas, Washington, Massachusetts, Nevada and Georgia, and through the foreign commercial lending operations in China and Hong Kong.
About Synovus Financial
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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