Financial Comparison: Synovus Financial (SNV) vs. Meridian Bancorp (EBSB)

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

Analyst Recommendations

This is a summary of recent recommendations for Synovus Financial and Meridian Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Synovus Financial 0 7 7 0 2.50
Meridian Bancorp 0 1 0 0 2.00

Synovus Financial currently has a consensus price target of $51.00, suggesting a potential upside of 34.88%. Meridian Bancorp has a consensus price target of $24.00, suggesting a potential upside of 46.79%. Given Meridian Bancorp’s higher probable upside, analysts clearly believe Meridian Bancorp is more favorable than Synovus Financial.

Risk & Volatility

Synovus Financial has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500. Comparatively, Meridian Bancorp has a beta of 0.17, meaning that its stock price is 83% less volatile than the S&P 500.

Dividends

Synovus Financial pays an annual dividend of $1.00 per share and has a dividend yield of 2.6%. Meridian Bancorp pays an annual dividend of $0.20 per share and has a dividend yield of 1.2%. Synovus Financial pays out 39.5% of its earnings in the form of a dividend. Meridian Bancorp pays out 21.1% 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. Synovus Financial has raised its dividend for 4 consecutive years and Meridian Bancorp has raised its dividend for 2 consecutive years. Synovus Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Synovus Financial and Meridian Bancorp’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Synovus Financial $1.51 billion 2.92 $275.47 million $2.53 14.94
Meridian Bancorp $208.17 million 4.25 $42.94 million $0.95 17.21

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

Insider & Institutional Ownership

77.6% of Synovus Financial shares are owned by institutional investors. Comparatively, 64.6% of Meridian Bancorp shares are owned by institutional investors. 1.5% of Synovus Financial shares are owned by insiders. Comparatively, 5.3% of Meridian Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Synovus Financial 22.41% 15.05% 1.35%
Meridian Bancorp 22.37% 8.99% 1.07%

Summary

Synovus Financial beats Meridian Bancorp on 12 of the 17 factors compared between the two stocks.

Synovus Financial Company Profile

Synovus Financial Corp. operates as the bank holding company for Synovus Bank that provides various financial products and services. It offers integrated financial services, including commercial and retail banking, financial management, insurance, and mortgage services. The company's commercial banking services comprise cash management, asset management, capital market, and institutional trust services, as well as commercial, financial, and real estate loans. Its retail banking services consist of accepting various types of demand and savings deposits; mortgage, installment, and other retail loans; investment and brokerage services; safe deposit services; automated banking services; automated fund transfer services; Internet based banking services; and bank credit card services, including MasterCard and Visa 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, asset management and financial planning services, and individual investment advice on equity and other securities, as well as trust services. As of December 31, 2017, it operated through 28 divisions and 250 branches in Georgia, Alabama, South Carolina, Florida, and Tennessee. Synovus Financial Corporation was founded in 1888 and is headquartered in Columbus, Georgia.

Meridian Bancorp Company Profile

Meridian Bancorp, Inc. operates as the holding company for East Boston Savings Bank that provides various financial products and services for individuals and businesses primarily in Essex, Middlesex, Norfolk, and Suffolk Counties, Massachusetts. The company accepts various deposit products, including non-interest-bearing demand deposits, such as checking accounts; interest-bearing demand accounts comprising NOW and money market accounts; savings accounts; and certificates of deposits, as well as commercial checking accounts. Its loan portfolio includes commercial real estate loans, which are secured by properties used for business purposes, such as office buildings, industrial facilities, and retail facilities; one- to four-family residential loans comprising mortgage loans that enable borrowers to purchase or refinance existing homes; multi-family real estate loans; construction loans; commercial and industrial loans; home equity lines of credit; and consumer loans that include automobile loans, loans secured by savings or certificate accounts, credit builders, and annuity and overdraft loans. In addition, the company offers non-deposit financial products, which comprise mutual funds, annuities, stocks, and bonds through a third-party broker-dealer; and long-term care insurance products. Further, it is also involved in the securities transactions business; and holding foreclosed real estate properties. As of March 1, 2018, the company operated 33 full-service locations, as well 1 mobile branch and 3 loan centers. Meridian Bancorp, Inc. was founded in 1848 and is headquartered in Peabody, Massachusetts.

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