Reviewing Synovus Financial (NYSE:SNV) and First Bancorp (NASDAQ:FBNC)

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Synovus Financial and First Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synovus Financial	0	10	9	0	2.47
First Bancorp	0	4	2	0	2.33

Synovus Financial presently has a consensus target price of $58.50, indicating a potential upside of 32.53%. First Bancorp has a consensus target price of $56.67, indicating a potential upside of 22.34%. Given Synovus Financial’s stronger consensus rating and higher possible upside, equities analysts clearly believe Synovus Financial is more favorable than First Bancorp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Synovus Financial	21.97%	16.45%	1.33%
First Bancorp	17.65%	8.96%	1.09%

Insider & Institutional Ownership

83.9% of Synovus Financial shares are held by institutional investors. Comparatively, 68.4% of First Bancorp shares are held by institutional investors. 1.0% of Synovus Financial shares are held by insiders. Comparatively, 3.7% of First Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Synovus Financial	$3.43 billion	1.78	$482.46 million	$5.36	8.24
First Bancorp	$537.14 million	3.58	$76.21 million	$2.34	19.79

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

Dividends

Synovus Financial pays an annual dividend of $1.56 per share and has a dividend yield of 3.5%. First Bancorp pays an annual dividend of $0.92 per share and has a dividend yield of 2.0%. Synovus Financial pays out 29.1% of its earnings in the form of a dividend. First Bancorp pays out 39.3% 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 1 consecutive years. Synovus Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Synovus Financial has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500. Comparatively, First Bancorp has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500.

Summary

Synovus Financial beats First Bancorp on 14 of the 17 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 First Bancorp

First Bancorp operates as the bank holding company for First Bank that provides banking products and services for individuals and small to medium-sized businesses. The company accepts deposit products, such as checking, savings, and money market accounts, as well as time deposits, including certificate of deposits and individual retirement accounts. It also offers loans for a range of consumer and commercial purposes comprising loans for business, real estate, personal, home improvement, and automobiles, as well as residential mortgages and small business administration loans; and accounts receivable financing and factoring, inventory financing, and purchase order financing services. In addition, the company provides credit and debit cards, letter of credits, and safe deposit box rental services, as well as electronic funds transfer services consisting of wire transfers; and internet and mobile banking, cash management, bank-by-phone services, and remote deposit capture services. Further, it offers investment and insurance products, such as mutual funds, annuities, long-term care insurance, life insurance, and company retirement plans, as well as property and casualty insurance products; and financial planning services. The company was founded in 1934 and is headquartered in Southern Pines, North Carolina.