Contrasting Pathward Financial (NASDAQ:CASH) and Synovus Financial (NYSE:SNV)

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

Dividends

Synovus Financial pays an annual dividend of $1.56 per share and has a dividend yield of 3.6%. Pathward Financial pays an annual dividend of $0.20 per share and has a dividend yield of 0.3%. Synovus Financial pays out 43.7% of its earnings in the form of a dividend. Pathward Financial pays out 2.9% 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

Synovus Financial has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500. Comparatively, Pathward Financial has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Synovus Financial	14.05%	14.70%	1.14%
Pathward Financial	21.91%	22.02%	2.28%

Valuation & Earnings

This table compares Synovus Financial and Pathward Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Synovus Financial	$2.01 billion	3.03	$482.46 million	$3.57	12.12
Pathward Financial	$600.62 million	3.15	$168.36 million	$6.86	11.56

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Synovus Financial and Pathward Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synovus Financial	0	7	11	0	2.61
Pathward Financial	0	1	1	0	2.50

Synovus Financial currently has a consensus target price of $56.17, indicating a potential upside of 29.81%. Pathward Financial has a consensus target price of $92.00, indicating a potential upside of 15.99%. Given Synovus Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Synovus Financial is more favorable than Pathward Financial.

Institutional & Insider Ownership

83.8% of Synovus Financial shares are held by institutional investors. Comparatively, 92.7% of Pathward Financial shares are held by institutional investors. 1.0% of Synovus Financial shares are held by company insiders. Comparatively, 1.2% of Pathward Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

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 Pathward Financial

Pathward Financial, Inc. operates as the bank holding company for Pathward, National Association that provides various banking products and services in the United States. The company operates through three segments: Consumer, Commercial, and Corporate Services/Other. It offers demand deposit accounts, savings accounts, and money market savings accounts. The company also provides commercial finance product comprising term lending, asset-based lending, factoring, lease financing, insurance premium finance, government guaranteed lending, and other commercial finance products; consumer credit products; other consumer financing services; tax services, which includes short-term refund advance loans and short-term electronic return originator advance loans; and warehouse financing services. In addition, it issues prepaid cards; and offers payment solutions, such as acceptance, processing, and settlement of credit card and debit card payments. The company was formerly known as Meta Financial Group, Inc. and changed its name to Pathward Financial, Inc. in July 2022. Pathward Financial, Inc. was founded in 1954 and is based in Sioux Falls, South Dakota.