The9 (NASDAQ:NCTY) vs. Synchrony Financial (NYSE:SYF) Critical Analysis

Synchrony Financial (NYSE:SYF) and The9 (NASDAQ:NCTY) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, risk, valuation, earnings, analyst recommendations, profitability and dividends.

Profitability

This table compares Synchrony Financial and The9’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Synchrony Financial	13.98%	16.64%	1.96%
The9	N/A	N/A	N/A

Earnings & Valuation

This table compares Synchrony Financial and The9″s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Synchrony Financial	$20.71 billion	1.27	$2.24 billion	$7.66	8.81
The9	$25.22 million	5.26	$2.82 million	N/A	N/A

Synchrony Financial has higher revenue and earnings than The9.

Risk and Volatility

Synchrony Financial has a beta of 1.59, suggesting that its share price is 59% more volatile than the S&P 500. Comparatively, The9 has a beta of 1.89, suggesting that its share price is 89% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Synchrony Financial and The9, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synchrony Financial	1	8	12	1	2.59
The9	0	0	0	0	0.00

Synchrony Financial currently has a consensus price target of $57.43, indicating a potential downside of 14.95%. Given Synchrony Financial’s stronger consensus rating and higher probable upside, equities analysts clearly believe Synchrony Financial is more favorable than The9.

Institutional & Insider Ownership

96.5% of Synchrony Financial shares are owned by institutional investors. Comparatively, 0.5% of The9 shares are owned by institutional investors. 0.3% of Synchrony Financial shares are owned by company insiders. Comparatively, 30.8% of The9 shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Synchrony Financial beats The9 on 10 of the 13 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 The9

The9 Limited operates as a cryptocurrency mining business in China, Eastern Europe, Asia, and North America. The company was formerly known as GameNow.net Limited and changed its name to The9 Limited in February 2004. The9 Limited was incorporated in 1999 and is headquartered in Shanghai, the People’s Republic of China.