Head-To-Head Comparison: Synchrony Financial (SYF) and Zurich Insurance Group (ZURVY)

Synchrony Financial (NYSE: SYF) and Zurich Insurance Group (OTCMKTS:ZURVY) are both large-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Institutional and Insider Ownership

89.6% of Synchrony Financial shares are owned by institutional investors. Comparatively, 0.3% of Zurich Insurance Group shares are owned by institutional investors. 0.1% of Synchrony Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Synchrony Financial and Zurich Insurance Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Synchrony Financial 1 4 11 0 2.63
Zurich Insurance Group 1 3 1 0 2.00

Synchrony Financial currently has a consensus target price of $40.40, indicating a potential upside of 18.44%. Given Synchrony Financial’s stronger consensus rating and higher possible upside, equities analysts clearly believe Synchrony Financial is more favorable than Zurich Insurance Group.

Profitability

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

Net Margins Return on Equity Return on Assets
Synchrony Financial 12.36% 15.60% 2.38%
Zurich Insurance Group N/A N/A N/A

Dividends

Synchrony Financial pays an annual dividend of $0.60 per share and has a dividend yield of 1.8%. Zurich Insurance Group pays an annual dividend of $1.47 per share and has a dividend yield of 4.6%. Synchrony Financial pays out 22.9% of its earnings in the form of a dividend. Zurich Insurance Group pays out 73.9% 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.

Volatility & Risk

Synchrony Financial has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500. Comparatively, Zurich Insurance Group has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.

Valuation & Earnings

This table compares Synchrony Financial and Zurich Insurance Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Synchrony Financial $16.70 billion 1.54 $1.94 billion $2.62 13.02
Zurich Insurance Group $63.96 billion 0.75 $3.00 billion $1.99 15.91

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

Summary

Synchrony Financial beats Zurich Insurance Group on 12 of the 16 factors compared between the two stocks.

Synchrony Financial Company Profile

Synchrony Financial operates as a consumer financial services company in the United States. The company offers private label credit cards, dual cards, general purpose co-branded credit cards, and small and medium-sized business credit products; and promotional financing for consumer purchases, such as private label credit cards and installment loans. It also provides promotional financing to consumers for health and personal care procedures, products, or services, such as dental, veterinary, cosmetic, vision and audiology; debt cancellation products; and deposit products, including certificates of deposit, individual retirement accounts, money market accounts, and savings accounts to retail and commercial customers, as well as accepts deposits through third-party securities brokerage firms. 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 multiple channels, including digital and print. Synchrony Financial was incorporated in 2003 and is headquartered in Stamford, Connecticut.

Zurich Insurance Group Company Profile

Zurich Insurance Group AG, together with its subsidiaries, provides insurance products and related services in Europe, North America, Latin America, and the Asia Pacific. The company operates through Property & Casualty Regions, Life Regions, Farmers, and Non-Core Businesses segments. It offers car, home, travel, general liability, life and critical illness, and other insurance products; and saving and investment, and pension and retirement planning products. The company also provides property, casualty, management or professional liability, trade credit, political risk, marine, automotive, and cyber risk insurance products; and international programs, risk engineering, claims, and captive services. In addition, it offers employee benefits and group risk solutions, corporate investment plans, multi-employer savings plans, pension plans, captive services, and pooling solutions, as well as international programs for employees. Further, the company provides non-claims administrative and management services to the farmers' exchanges; and reinsurance services. It serves individuals, small businesses, and mid-sized and large companies, as well as multinational corporations. Zurich Insurance Group AG was founded in 1872 and is headquartered in Zurich, Switzerland.

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