Contrasting Synchrony Financial (NYSE:SYF) & Green Dot (NYSE:GDOT)

Synchrony Financial (NYSE:SYF) and Green Dot (NYSE:GDOT) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.

Institutional and Insider Ownership

96.5% of Synchrony Financial shares are held by institutional investors. Comparatively, 92.6% of Green Dot shares are held by institutional investors. 0.4% of Synchrony Financial shares are held by insiders. Comparatively, 1.4% of Green Dot shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations and price targets for Synchrony Financial and Green Dot, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synchrony Financial	0	9	10	0	2.53
Green Dot	1	2	1	0	2.00

Synchrony Financial currently has a consensus price target of $87.78, indicating a potential upside of 21.48%. Green Dot has a consensus price target of $16.12, indicating a potential upside of 39.61%. Given Green Dot’s higher probable upside, analysts plainly believe Green Dot is more favorable than Synchrony Financial.

Risk and Volatility

Synchrony Financial has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500. Comparatively, Green Dot has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Valuation & Earnings

This table compares Synchrony Financial and Green Dot”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Synchrony Financial	$22.60 billion	1.00	$3.55 billion	$9.58	7.54
Green Dot	$2.08 billion	0.32	-$98.87 million	($0.08)	-144.38

Synchrony Financial has higher revenue and earnings than Green Dot. Green Dot 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 Green Dot’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Synchrony Financial	14.59%	22.26%	2.79%
Green Dot	-0.11%	7.13%	1.04%

Summary

Synchrony Financial beats Green Dot on 12 of the 14 factors compared between the two stocks.

About Synchrony Financial

Synchrony Financial is a consumer financial services company that provides credit products and related services through partnerships with retailers, healthcare providers and other businesses. Its offerings include private-label and co-branded credit cards, installment loans and promotional financing options. The company also provides consumer banking products, including savings accounts and certificates of deposit. Its financing solutions serve customers in areas such as retail, home improvement, automotive, health and wellness, and digital commerce, primarily in the United States.

About Green Dot

Green Dot Corporation is a financial technology company and bank holding company that provides digital banking, payments and money-movement services. Its offerings include consumer banking products such as GO2bank and prepaid debit cards, as well as services that help customers receive deposits, make payments and access cash. Through its banking-as-a-service platform, Green Dot also provides businesses with banking technology, payment capabilities and program management services that can be integrated into their own products.