CTT Correios de Portugal (OTCMKTS:CTTPY) and Synchrony Financial (NYSE:SYF) Critical Analysis

Synchrony Financial (NYSE:SYF) and CTT Correios de Portugal (OTCMKTS:CTTPY) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, profitability, dividends, analyst recommendations, earnings, institutional ownership and valuation.

Risk & Volatility

Synchrony Financial has a beta of 1.43, indicating that its share price is 43% more volatile than the S&P 500. Comparatively, CTT Correios de Portugal has a beta of -0.05, indicating that its share price is 105% less volatile than the S&P 500.

Valuation & Earnings

This table compares Synchrony Financial and CTT Correios de Portugal”s 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	1.10	$3.55 billion	$9.29	7.67
CTT Correios de Portugal	$1.20 billion	0.91	$49.28 million	$0.82	19.80

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

Analyst Ratings

This is a summary of current ratings and target prices for Synchrony Financial and CTT Correios de Portugal, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synchrony Financial	0	7	13	1	2.71
CTT Correios de Portugal	0	0	0	0	0.00

Synchrony Financial presently has a consensus price target of $87.11, indicating a potential upside of 22.18%. Given Synchrony Financial’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Synchrony Financial is more favorable than CTT Correios de Portugal.

Insider and Institutional Ownership

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

Profitability

This table compares Synchrony Financial and CTT Correios de Portugal’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%
CTT Correios de Portugal	4.13%	16.54%	0.88%

Dividends

Synchrony Financial pays an annual dividend of $1.20 per share and has a dividend yield of 1.7%. CTT Correios de Portugal pays an annual dividend of $0.18 per share and has a dividend yield of 1.1%. Synchrony Financial pays out 12.9% of its earnings in the form of a dividend. CTT Correios de Portugal pays out 22.0% 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 raised 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.

Summary

Synchrony Financial beats CTT Correios de Portugal on 17 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 CTT Correios de Portugal

CTT – Correios De Portugal, S.A., together with its subsidiaries, provides postal and financial services worldwide. It operates through Mail, Express & Parcels, Financial Services & Retail, and Bank segments. The company offers courier and urgent mail transport services; postal financial services; and banking services. It also engages in the business of payments related to collection of invoices and fines. In addition, the company enables the payment of various services and utilities through a network of approximately 5,000 agents covering business outlets as stationery stores, tobacco shops, kiosks, and supermarkets. It operates a retail network of 566 post offices; 1,808 postal agencies; 223 postal delivery offices; 4,576 postal delivery routes; and a fleet of 3,925 vehicles. The company was formerly known as Correio Publico. CTT – Correios De Portugal, S.A. was founded in 1520 and is headquartered in Lisbon, Portugal.