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
-
Disney’s Risky Acceptance of AI VideosThe Kiplinger Letter Disney will let fans run wild with AI-generated videos of its top characters. The move highlights the uneasy partnership between AI companies and Hollywood.
-
Ask the Editor: Itemized DeductionsAsk the Editor In this week's Ask the Editor Q&A, Joy Taylor answers questions on itemized deductions claimed on Schedule A of Form 1040
-
9 Types of Insurance You Don't NeedFinancial Planning If you're paying for these types of insurance, you may be wasting your money. Here's what you need to know.
-
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.
-
If You Put $1,000 into Qualcomm Stock 20 Years Ago, Here's What You Would Have TodayQualcomm stock has been a big disappointment for truly long-term investors.
-
If You'd Put $1,000 Into Home Depot Stock 20 Years Ago, Here's What You'd Have TodayHome Depot stock has been a buy-and-hold banger for truly long-term investors.
-
What the Rich Know About Investing That You Don'tPeople like Warren Buffett become people like Warren Buffett by following basic rules and being disciplined. Here's how to accumulate real wealth.
-
If You'd Put $1,000 Into Bank of America Stock 20 Years Ago, Here's What You'd Have TodayBank of America stock has been a massive buy-and-hold bust.
-
If You'd Put $1,000 Into Oracle Stock 20 Years Ago, Here's What You'd Have TodayORCL Oracle stock has been an outstanding buy-and-hold bet for decades.
-
How to Invest for Rising Data Integrity RiskAmid a broad assault on venerable institutions, President Trump has targeted agencies responsible for data critical to markets. How should investors respond?
-
If You'd Put $1,000 Into Sherwin-Williams Stock 20 Years Ago, Here's What You'd Have TodaySherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
