Synovus Financial, a regional bank holding company based in Columbus, Ga., is on a roll. Its profits jumped 18% in 2005, to $516 million, up from $437 million the year before, propelled by growth in the number of loans made by the company's 39 community banks.
Synovus operates two lines of business. Its main business consists of banks in Alabama, Florida, Georgia, South Carolina and Tennessee. Synovus also owns 81% of Total System Services (TSS), the top credit-card processor in the world.
Synovus's stock (symbol SNV) looks like a bargain. At $27, it trades at 15 times analysts' 2006 earnings estimate of $1.83 a share, according to Thomson First Call. Prudential Equity Group analyst Michael Mayo says the stock is worth $32.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Synovus has a history of strong performance. Over the past decade, earnings per share have grown at a compounded rate of 14%, according to Morningstar. Synovus executives predict that earnings will increase 12% to 14% in 2006.
Synovus' banks are heavily focused on commercial and real-estate loans, but lately management has been revamping and expanding the retail side of the business. The company's plans include modernizing the look of branches, building its wealth-management business, and boosting its income from products such as CDs, money market accounts and interest-bearing checking accounts. Mayo says such plans should spur solid growth through 2007.
A potential hurdle for Synovus is the recent loss of two major TSS clients, Bank of America and Citigroup Sears. Bank of America is shifting the processing of its consumer credit cards in-house, and Citigroup Sears is switching its accounts to TSS rival First Data. Mayo says these concerns are overblown because TSS expects to add 75 million accounts in 2006, a large chunk of which will come from Capital One, a new client.
--Katy Marquardt
-
Americans, Even With Higher Incomes, Are Feeling the SqueezeA 50-year mortgage probably isn’t the answer, but there are other ways to alleviate the continuing sting of high prices
-
Hiding the Truth From Your Financial Adviser Can Cost YouHiding assets or debt from a financial adviser damages the relationship as well as your finances. If you're not being fully transparent, it's time to ask why.
-
How to Manage a Disagreement With Your Financial AdviserKnowing how to deal with a disagreement can improve both your finances and your relationship with your planner.
-
If You'd Put $1,000 Into Caterpillar Stock 20 Years Ago, Here's What You'd Have TodayCaterpillar stock has been a remarkably resilient market beater for a very long time.
-
I'm a 55-Year-Old Dad. Here’s How My 28-Year-Old Daughter Showed Me That AXP Is Still a Solid InvestmentAmerican Express stock is still a solid investment because management understands the value of its brand and is building a wide moat around it.
-
If You'd Put $1,000 Into AMD Stock 20 Years Ago, Here's What You'd Have TodayAdvanced Micro Devices stock is soaring thanks to AI, but as a buy-and-hold bet, it's been a market laggard.
-
If You'd Put $1,000 Into UPS Stock 20 Years Ago, Here's What You'd Have TodayUnited Parcel Service stock has been a massive long-term laggard.
-
How the Stock Market Performed in the First Year of Trump's Second TermSix months after President Donald Trump's inauguration, take a look at how the stock market has performed.
-
If You'd Put $1,000 Into Lowe's Stock 20 Years Ago, Here's What You'd Have TodayLowe's stock has delivered disappointing returns recently, but it's been a great holding for truly patient investors.
-
If You'd Put $1,000 Into 3M Stock 20 Years Ago, Here's What You'd Have TodayMMM stock has been a pit of despair for truly long-term shareholders.
-
If You'd Put $1,000 Into Coca-Cola Stock 20 Years Ago, Here's What You'd Have TodayEven with its reliable dividend growth and generous stock buybacks, Coca-Cola has underperformed the broad market in the long term.
