Contrasting OceanFirst Financial (NASDAQ:OCFC) and Synovus Financial (NYSE:SNV)

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

Risk and Volatility

Synovus Financial has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500. Comparatively, OceanFirst Financial has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Insider & Institutional Ownership

83.9% of Synovus Financial shares are owned by institutional investors. Comparatively, 71.0% of OceanFirst Financial shares are owned by institutional investors. 0.8% of Synovus Financial shares are owned by company insiders. Comparatively, 5.0% of OceanFirst Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Synovus Financial and OceanFirst Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Synovus Financial	$3.45 billion	2.36	$543.71 million	$2.21	26.07
OceanFirst Financial	$384.08 million	3.18	$104.03 million	$1.75	11.93

Synovus Financial has higher revenue and earnings than OceanFirst Financial. OceanFirst 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 Ratings

This is a breakdown of current recommendations and price targets for Synovus Financial and OceanFirst Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synovus Financial	0	6	11	0	2.65
OceanFirst Financial	0	4	2	0	2.33

Synovus Financial currently has a consensus target price of $52.71, suggesting a potential downside of 8.53%. OceanFirst Financial has a consensus target price of $19.75, suggesting a potential downside of 5.41%. Given OceanFirst Financial’s higher probable upside, analysts clearly believe OceanFirst Financial is more favorable than Synovus Financial.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Synovus Financial	10.82%	13.43%	1.04%
OceanFirst Financial	15.28%	6.08%	0.76%

Dividends

Synovus Financial pays an annual dividend of $1.52 per share and has a dividend yield of 2.6%. OceanFirst Financial pays an annual dividend of $0.80 per share and has a dividend yield of 3.8%. Synovus Financial pays out 68.8% of its earnings in the form of a dividend. OceanFirst Financial pays out 45.7% 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. OceanFirst Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Synovus Financial beats OceanFirst Financial on 10 of the 16 factors compared between the two stocks.

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 OceanFirst Financial

OceanFirst Financial Corp. operates as the bank holding company for OceanFirst Bank N.A. that provides community banking services to retail and commercial customers. It accepts money market accounts, savings accounts, interest-bearing checking accounts, non-interest-bearing accounts, and time deposits, that includes brokered deposits to retail, government, and business customers. The company also offers commercial real estate, multi-family, land loans, construction, and commercial and industrial loans; fixed-rate and adjustable-rate mortgage loans that are secured by one-to-four family residences; and consumer loans, such as home equity loans and lines of credit, student loans, overdraft line of credit, loans on savings accounts, and other consumer loans. In addition, it invests in mortgage-backed securities, securities issued by the U.S. Government and agencies, corporate securities, and other investments. Further, the company offers bankcard, trust and asset management services; and bank owned life insurance products. The company was founded in 1902 and is based in Red Bank, New Jersey.