Finward Bancorp (NASDAQ:FNWD) and Synchrony Financial (NYSE:SYF) Head to Head Analysis

Synchrony Financial (NYSE:SYF) and Finward Bancorp (NASDAQ:FNWD) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, dividends, risk and institutional ownership.

Institutional and Insider Ownership

96.5% of Synchrony Financial shares are held by institutional investors. Comparatively, 26.6% of Finward Bancorp shares are held by institutional investors. 0.3% of Synchrony Financial shares are held by insiders. Comparatively, 13.1% of Finward Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Synchrony Financial and Finward Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Synchrony Financial	15.72%	23.07%	3.01%
Finward Bancorp	8.00%	5.15%	0.39%

Valuation and Earnings

This table compares Synchrony Financial and Finward Bancorp”s gross 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	1.16	$3.50 billion	$9.29	7.82
Finward Bancorp	$101.06 million	1.57	$12.13 million	$1.88	19.49

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

Dividends

Synchrony Financial pays an annual dividend of $1.20 per share and has a dividend yield of 1.7%. Finward Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 1.3%. Synchrony Financial pays out 12.9% of its earnings in the form of a dividend. Finward Bancorp pays out 25.5% 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. Synchrony Financial has increased its dividend for 4 consecutive years. Synchrony Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Synchrony Financial has a beta of 1.43, indicating that its share price is 43% more volatile than the S&P 500. Comparatively, Finward Bancorp has a beta of 0.31, indicating that its share price is 69% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Synchrony Financial and Finward Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synchrony Financial	0	9	13	1	2.65
Finward Bancorp	0	2	1	0	2.33

Synchrony Financial presently has a consensus target price of $87.05, indicating a potential upside of 19.86%. Finward Bancorp has a consensus target price of $34.00, indicating a potential downside of 7.23%. Given Synchrony Financial’s stronger consensus rating and higher possible upside, equities analysts clearly believe Synchrony Financial is more favorable than Finward Bancorp.

Summary

Synchrony Financial beats Finward Bancorp on 15 of the 18 factors compared between the two stocks.

About Synchrony Financial

Synchrony Financial, together with its subsidiaries, operates as a consumer financial services company in the United States. It provides credit products, such as credit cards, commercial credit products, and consumer installment loans. The company also offers private label credit cards, dual co-brand and general purpose credit cards, short- and long-term installment loans, and consumer banking products; and deposit products, including certificates of deposit, individual retirement accounts, money market accounts, and savings accounts, and sweep and affinity deposits, as well as accepts deposits through third-party securities brokerage firms. In addition, it provides debt cancellation products to its credit card customers through online, mobile, and direct mail; and healthcare payments and financing solutions under the CareCredit and Walgreens brands; payments and financing solutions in the apparel, specialty retail, outdoor, music, and luxury industries, such as American Eagle, Dick's Sporting Goods, Guitar Center, Kawasaki, Pandora, Polaris, Suzuki, and Sweetwater. 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 various channels, such as digital and print. It serves digital, health and wellness, retail, home, auto, telecommunications, jewelry, pets, and other industries. The company was founded in 1932 and is headquartered in Stamford, Connecticut.

About Finward Bancorp

Finward Bancorp operates as the holding company for Peoples Bank that provides various banking products and services. The company’s deposit products include non-interest- and interest-bearing demand accounts, savings accounts, money market deposit accounts, certificate accounts, and retirement savings plans. Its loan products portfolio comprises residential mortgage loans that enable borrowers to purchase existing homes, refinance existing homes, or construct new homes; construction loans primarily to individuals and contractors; commercial real estate loans; consumer loans to individuals for personal, household, or family purposes; home equity line of credit; home improvement loans and equity loans; commercial business loans; government loans; and loans to municipalities. The company also offers estate and retirement planning, custodial services, guardianships, IRA accounts, and investment agency accounts, as well as serves as the personal representative of estates, and acts as trustee for revocable and irrevocable trusts. In addition, it provides insurance and annuity investments to wealth management customers; holds real estate properties; and operates as a real estate investment trust. The company was formerly known as NorthWest Indiana Bancorp and changed its name to Finward Bancorp in May 2021. Finward Bancorp was founded in 1916 and is headquartered in Munster, Indiana.