Synchrony Financial (SYF) & World Acceptance Corporation (WRLD) Head-To-Head Analysis
Synchrony Financial (NYSE: SYF) and World Acceptance Corporation (NASDAQ:WRLD) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, dividends, risk, institutional ownership, earnings, analyst recommendations and profitability.
This table compares Synchrony Financial and World Acceptance Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|World Acceptance Corporation||13.13%||15.75%||8.48%|
Insider and Institutional Ownership
89.6% of Synchrony Financial shares are held by institutional investors. Comparatively, 96.9% of World Acceptance Corporation shares are held by institutional investors. 0.0% of Synchrony Financial shares are held by insiders. Comparatively, 27.3% of World Acceptance Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Synchrony Financial pays an annual dividend of $0.60 per share and has a dividend yield of 1.9%. World Acceptance Corporation does not pay a dividend. Synchrony Financial pays out 22.6% of its earnings in the form of a dividend.
This is a summary of recent ratings for Synchrony Financial and World Acceptance Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|World Acceptance Corporation||3||0||0||0||1.00|
Synchrony Financial currently has a consensus price target of $37.13, indicating a potential upside of 19.80%. World Acceptance Corporation has a consensus price target of $52.33, indicating a potential downside of 29.41%. Given Synchrony Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Synchrony Financial is more favorable than World Acceptance Corporation.
Earnings and Valuation
This table compares Synchrony Financial and World Acceptance Corporation’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Synchrony Financial||$7.04 billion||3.50||$2.11 billion||$2.65||11.69|
|World Acceptance Corporation||$533.56 million||1.21||$136.07 million||$7.98||9.29|
Synchrony Financial has higher revenue and earnings than World Acceptance Corporation. World Acceptance Corporation is trading at a lower price-to-earnings ratio than Synchrony Financial, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Synchrony Financial has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, World Acceptance Corporation has a beta of 2.34, suggesting that its stock price is 134% more volatile than the S&P 500.
Synchrony Financial beats World Acceptance Corporation on 9 of the 16 factors compared between the two stocks.
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.
About World Acceptance Corporation
World Acceptance Corporation operates a small-loan consumer finance business in 15 states and Mexico as of March 31, 2016. The Company offers short-term small installment loans, medium-term larger installment loans, related credit insurance and ancillary products and services to individuals. The Company offers standardized installment loans generally between $300 and $4,000 through 1,339 branches in Alabama, Georgia, Idaho, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, South Carolina, Texas, Tennessee, Wisconsin and Mexico as of March 31, 2016. The Company generally serves individuals with limited access to other sources of consumer credit, such as banks, credit unions, other consumer finance businesses and credit card lenders. In the United States branches, the Company also offers income tax return preparation services to its loan customers and other individuals.
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