Synchrony Financial (NYSE:SYF – Get Free Report) and Vroom (NASDAQ:VRM – Get Free Report) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, risk, earnings and institutional ownership.
Earnings and Valuation
This table compares Synchrony Financial and Vroom”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 | 1.03 | $3.55 billion | $9.76 | 7.36 |
| Vroom | $178.83 million | 0.26 | -$7.96 million | ($11.12) | -0.80 |
Institutional & Insider Ownership
96.5% of Synchrony Financial shares are owned by institutional investors. Comparatively, 25.8% of Vroom shares are owned by institutional investors. 0.4% of Synchrony Financial shares are owned by company insiders. Comparatively, 2.9% of Vroom shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Analyst Ratings
This is a breakdown of current ratings for Synchrony Financial and Vroom, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Synchrony Financial | 0 | 6 | 9 | 0 | 2.60 |
| Vroom | 1 | 0 | 0 | 0 | 1.00 |
Synchrony Financial presently has a consensus price target of $88.29, indicating a potential upside of 22.95%. Given Synchrony Financial’s stronger consensus rating and higher probable upside, equities analysts plainly believe Synchrony Financial is more favorable than Vroom.
Profitability
This table compares Synchrony Financial and Vroom’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Synchrony Financial | 15.44% | 23.09% | 2.98% |
| Vroom | -32.38% | -47.65% | -5.59% |
Volatility & Risk
Synchrony Financial has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500. Comparatively, Vroom has a beta of 1.27, indicating that its share price is 27% more volatile than the S&P 500.
Summary
Synchrony Financial beats Vroom on 13 of the 14 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 Vroom
Vroom, Inc. operates as an automotive finance company. The company offers vehicle financing to its customers through third party dealers under the UACC brand. It also provides artificial intelligence powered analytics and digital services to dealers, automotive financial services companies, and others in the automotive industry for automotive retail. The company was formerly known as Auto America, Inc. and changed its name to Vroom, Inc. in July 2015. Vroom, Inc. was incorporated in 2012 and is based in Houston, Texas.
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