Reviewing Synchrony Financial (NYSE:SYF) and Finward Bancorp (NASDAQ:FNWD)

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

Profitability

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

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

Insider and Institutional Ownership

26.6% of Finward Bancorp shares are owned by institutional investors. Comparatively, 96.5% of Synchrony Financial shares are owned by institutional investors. 13.1% of Finward Bancorp shares are owned by insiders. Comparatively, 0.3% of Synchrony Financial shares are owned by 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.

Volatility & Risk

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

Analyst Ratings

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

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

Finward Bancorp currently has a consensus target price of $34.00, indicating a potential downside of 6.44%. Synchrony Financial has a consensus target price of $87.05, indicating a potential upside of 18.66%. Given Synchrony Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Synchrony Financial is more favorable than Finward Bancorp.

Valuation and Earnings

This table compares Finward Bancorp and Synchrony Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Finward Bancorp	$101.06 million	1.56	$12.13 million	$1.91	19.03
Synchrony Financial	$22.60 billion	1.17	$3.50 billion	$9.16	8.01

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

Finward Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 1.3%. Synchrony Financial pays an annual dividend of $1.20 per share and has a dividend yield of 1.6%. Finward Bancorp pays out 25.1% of its earnings in the form of a dividend. Synchrony Financial pays out 13.1% 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.

Summary

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

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.

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.