Financial Contrast: Synovus Financial (SNV) & CIT Group (CIT)

Synovus Financial (NYSE:SNV) and CIT Group (NYSE:CIT) are both mid-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Insider & Institutional Ownership

81.0% of Synovus Financial shares are owned by institutional investors. 1.5% of Synovus Financial shares are owned by company insiders. Comparatively, 0.3% of CIT Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for Synovus Financial and CIT Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Synovus Financial 0 9 2 0 2.18
CIT Group 0 8 4 0 2.33

Synovus Financial currently has a consensus price target of $51.33, suggesting a potential upside of 11.52%. CIT Group has a consensus price target of $54.47, suggesting a potential upside of 5.68%. Given Synovus Financial’s higher probable upside, equities analysts clearly believe Synovus Financial is more favorable than CIT Group.

Profitability

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

Net Margins Return on Equity Return on Assets
Synovus Financial 21.47% 13.61% 1.23%
CIT Group 10.81% 7.38% 1.00%

Earnings & Valuation

This table compares Synovus Financial and CIT Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Synovus Financial $1.51 billion 3.58 $275.47 million $2.53 18.19
CIT Group $3.21 billion 1.82 $468.20 million $3.07 16.79

CIT Group has higher revenue and earnings than Synovus Financial. CIT Group 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 $1.00 per share and has a dividend yield of 2.2%. CIT Group pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. Synovus Financial pays out 39.5% of its earnings in the form of a dividend. CIT Group pays out 32.6% 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 increased its dividend for 4 consecutive years. Synovus Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Synovus Financial has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500. Comparatively, CIT Group has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500.

Summary

Synovus Financial beats CIT Group on 10 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 various financial products and services. It offers integrated financial services, including commercial and retail banking, financial management, insurance, and mortgage services. The company's commercial banking services comprise cash management, asset management, capital market, and institutional trust services, as well as commercial, financial, and real estate loans. Its retail banking services consist of accepting various types of demand and savings deposits; mortgage, installment, and other retail loans; investment and brokerage services; safe deposit services; automated banking services; automated fund transfer services; Internet based banking services; and bank credit card services, including MasterCard and Visa 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, asset management and financial planning services, and individual investment advice on equity and other securities, as well as trust services. As of December 31, 2017, it operated through 28 divisions and 250 branches in Georgia, Alabama, South Carolina, Florida, and Tennessee. Synovus Financial Corporation was founded in 1888 and is headquartered in Columbus, Georgia.

About CIT Group

CIT Group Inc. operates as the bank holding company for CIT Bank, National Association that provides banking and related services to commercial and individual customers. The company operates through three segments: Commercial Banking, Consumer Banking, and Non-Strategic Portfolios (NSP). The Commercial Banking segment offers lending, leasing, and other financial and advisory services primarily to small and middle-market companies; factoring, receivables management products, and secured supply chain financing; and equipment leasing and secured financing to railroads and non-rail companies. The Consumer Banking segment provides mortgage loans and deposits. It accepts deposits, including checking and savings accounts, money market accounts, and certificates of deposit; and offers residential mortgage and small business administration loans, and reverse mortgages, as well as fiduciary services. The NSP segment provides equipment financing, secured lending, and leasing and advisory services to small and middle-market businesses. The company also offers online banking services. It operates through a network of 70 branches located in southern California. CIT Group Inc. was founded in 1908 and is headquartered in Livingston, New Jersey.

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