Head-To-Head Analysis: SLM (NASDAQ:SLMBP) vs. Synchrony Financial (NYSE:SYF)

SLM (NASDAQ:SLMBP) and Synchrony Financial (NYSE:SYF) are both financial services companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, earnings, profitability, institutional ownership and valuation.

Insider and Institutional Ownership

96.5% of Synchrony Financial shares are owned by institutional investors. 0.7% of Synchrony Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares SLM and Synchrony Financial’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SLM	$1.94 billion	N/A	N/A	N/A	N/A
Synchrony Financial	$20.71 billion	0.83	$2.24 billion	$6.97	6.12

Synchrony Financial has higher revenue and earnings than SLM.

Analyst Ratings

This is a summary of recent recommendations for SLM and Synchrony Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SLM	0	0	0	0	N/A
Synchrony Financial	1	10	9	0	2.40

Synchrony Financial has a consensus target price of $43.74, indicating a potential upside of 1.74%. Given Synchrony Financial’s higher possible upside, analysts clearly believe Synchrony Financial is more favorable than SLM.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SLM	N/A	N/A	N/A
Synchrony Financial	13.49%	16.01%	1.84%

Dividends

SLM pays an annual dividend of $7.37 per share and has a dividend yield of 9.5%. Synchrony Financial pays an annual dividend of $1.00 per share and has a dividend yield of 2.3%. Synchrony Financial pays out 14.3% of its earnings in the form of a dividend. SLM has raised its dividend for 1 consecutive years and Synchrony Financial has raised its dividend for 2 consecutive years.

Summary

Synchrony Financial beats SLM on 9 of the 11 factors compared between the two stocks.

About SLM

SLM Corporation, through its subsidiaries, originates and services private education loans to students and their families to finance the cost of their education in the United States. It is also involved in the provision of retail deposit accounts, including certificates of deposit, money market accounts, and high-yield savings accounts; and interest-bearing omnibus accounts. The company was formerly known as New BLC Corporation and changed its name to SLM Corporation in December 2013. SLM Corporation was founded in 1972 and is headquartered in Newark, Delaware.

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.