Synovus Financial (NYSE:SNV) and Westamerica Bancorporation (NASDAQ:WABC) Critical Analysis

Synovus Financial (NYSE:SNV) and Westamerica Bancorporation (NASDAQ:WABC) are both financial services companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, profitability and institutional ownership.

Risk & Volatility

Synovus Financial has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500. Comparatively, Westamerica Bancorporation has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500.

Institutional & Insider Ownership

83.9% of Synovus Financial shares are owned by institutional investors. Comparatively, 81.9% of Westamerica Bancorporation shares are owned by institutional investors. 0.8% of Synovus Financial shares are owned by insiders. Comparatively, 4.4% of Westamerica Bancorporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for Synovus Financial and Westamerica Bancorporation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synovus Financial	0	7	9	0	2.56
Westamerica Bancorporation	0	2	0	0	2.00

Synovus Financial currently has a consensus price target of $41.50, indicating a potential upside of 6.77%. Westamerica Bancorporation has a consensus price target of $53.50, indicating a potential upside of 11.11%. Given Westamerica Bancorporation’s higher possible upside, analysts clearly believe Westamerica Bancorporation is more favorable than Synovus Financial.

Valuation and Earnings

This table compares Synovus Financial and Westamerica Bancorporation’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Synovus Financial	$3.45 billion	1.65	$543.71 million	$2.92	13.31
Westamerica Bancorporation	$327.54 million	3.92	$161.77 million	$5.92	8.13

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

Dividends

Synovus Financial pays an annual dividend of $1.52 per share and has a dividend yield of 3.9%. Westamerica Bancorporation pays an annual dividend of $1.76 per share and has a dividend yield of 3.7%. Synovus Financial pays out 52.1% of its earnings in the form of a dividend. Westamerica Bancorporation pays out 29.7% 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. Synovus Financial has raised its dividend for 2 consecutive years and Westamerica Bancorporation has raised its dividend for 32 consecutive years.

Profitability

This table compares Synovus Financial and Westamerica Bancorporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Synovus Financial	13.29%	12.93%	0.94%
Westamerica Bancorporation	48.35%	21.99%	2.42%

Summary

Westamerica Bancorporation beats Synovus Financial on 9 of the 17 factors compared between the two stocks.

About Synovus Financial

Synovus Financial Corp. operates as the bank holding company for Synovus Bank that provides commercial and consumer banking products and services. It operates through four segments: Community Banking, Wholesale Banking, Consumer Banking, and Financial Management Services. The company's commercial banking services include treasury and asset management, capital market, and institutional trust services, as well as commercial, financial, and real estate lending services. Its consumer banking services comprise accepting customary types of demand and savings deposits accounts; mortgage, installment, and other consumer loans; investment and brokerage services; safe deposit services; automated banking services; automated fund transfers; internet-based banking services; and bank credit and debit card services, including Visa and MasterCard services. The company also offers various other financial services, including portfolio management for fixed-income securities, investment banking, execution of securities transactions as a broker/dealer, trust management, and financial planning services, as well as provides individual investment advice on equity and other securities. The company was founded in 1888 and is headquartered in Columbus, Georgia.

About Westamerica Bancorporation

Westamerica Bancorporation operates as a bank holding company for the Westamerica Bank that provides various banking products and services to individual and commercial customers. The company accepts various deposit products, including retail savings and checking accounts, as well as certificates of deposit. Its loan portfolio includes commercial, commercial and residential real estate, real estate construction, and consumer installment loans, as well as indirect automobile loans. The company was formerly known as Independent Bankshares Corporation and changed its name to Westamerica Bancorporation in 1983. The company was founded in 1884 and is headquartered in San Rafael, California.