East West Bancorp (EWBC) vs. Synovus Financial (SNV) Head-To-Head Survey

East West Bancorp (NASDAQ: EWBC) and Synovus Financial (NYSE:SNV) are both mid-cap finance 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.

Institutional & Insider Ownership

91.4% of East West Bancorp shares are owned by institutional investors. Comparatively, 77.8% of Synovus Financial shares are owned by institutional investors. 0.9% of East West Bancorp shares are owned by insiders. Comparatively, 1.5% of Synovus Financial 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.

Risk & Volatility

East West Bancorp has a beta of 1.46, meaning that its share price is 46% more volatile than the S&P 500. Comparatively, Synovus Financial has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500.

Profitability

This table compares East West Bancorp and Synovus Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
East West Bancorp 34.75% 13.51% 1.37%
Synovus Financial 21.39% 10.44% 0.97%

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
East West Bancorp $1.32 billion 6.57 $431.67 million $3.64 16.49
Synovus Financial $1.30 billion 4.47 $246.78 million $2.48 19.55

East West Bancorp has higher revenue and earnings than Synovus Financial. East West Bancorp 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

East West Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 1.3%. Synovus Financial pays an annual dividend of $0.60 per share and has a dividend yield of 1.2%. East West Bancorp pays out 22.0% of its earnings in the form of a dividend. Synovus Financial pays out 24.2% 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. East West Bancorp has raised its dividend for 3 consecutive years. East West Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings for East West Bancorp and Synovus Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
East West Bancorp 1 6 4 0 2.27
Synovus Financial 0 8 5 0 2.38

East West Bancorp currently has a consensus price target of $64.56, indicating a potential upside of 7.54%. Synovus Financial has a consensus price target of $45.00, indicating a potential downside of 7.18%. Given East West Bancorp’s higher possible upside, research analysts clearly believe East West Bancorp is more favorable than Synovus Financial.

Summary

East West Bancorp beats Synovus Financial on 13 of the 17 factors compared between the two stocks.

East West Bancorp Company Profile

East West Bancorp, Inc. is a bank holding company. The Company’s principal business is to serve as a holding company for East West Bank (the Bank) and other banking or banking-related subsidiaries. The Bank is a California state-chartered bank, which operates in the United States and Greater China. The Bank provides a range of personal and commercial banking services to businesses, business executives, professionals, and other individuals. It operates through three segments: Retail Banking, Commercial Banking and Other. The Retail Banking segment focuses primarily on retail operations through the Bank’s branch network. The Commercial Banking segment primarily generates commercial and industrial (C&I) loans and commercial real estate (CRE) loans through the domestic commercial lending operations in California, New York, Texas, Washington, Massachusetts, Nevada and Georgia, and through the foreign commercial lending operations in China and Hong Kong.

Synovus Financial Company Profile

Synovus Financial Corp. is a financial services company and a bank holding company. The Company provides integrated financial services, including commercial and retail banking, financial management, insurance and mortgage services, to its customers through locally branded banking divisions of its subsidiary bank, Synovus Bank (the Bank), and other offices in Georgia, Alabama, South Carolina, Florida and Tennessee. The Bank offers commercial banking services and retail banking services. The Bank’s commercial banking services include cash management, asset management, capital markets services, institutional trust services, and commercial, financial and real estate loans. Its retail banking services include mortgage, installment and other retail loans; investment and brokerage services; safe deposit services; automated banking services; automated fund transfers; Internet-based banking services, and bank credit card services, including MasterCard and Visa services.

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