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Here's Why You Should Retain Synchrony Financial (SYF) Now
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Synchrony Financial (SYF - Free Report) has been in investors’ good books owing to its solid portfolio, several buyouts and alliances, a well-performing CareCredit platform, and a strong financial position. Other factors contributing to this upside are repeat sales, an advanced digital solutions suite and cost-curbing efforts.
Synchrony Financial carries a Zacks Rank #3 (Hold) at present. In 2021, SYF witnessed around 25 million new account originations and a record purchase volume of $166 billion. SYF has a strong pipeline of activities lined up, which poise it well for growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The ROE of Synchrony Financial for the trailing 12 months is 30.8%, which remains higher than the industry average of 22.9%. This reflects SYF’s efficiency in utilizing its shareholders’ funds.
SYF’s earnings beat estimates in each of the trailing four quarters, the average being 18.08%.
This financial services player is constantly making efforts to boost its portfolio. In fact, multiple alliances and buyouts helped the player enhance its digital capabilities as well as diversify its portfolio. Synchrony Financial is constantly renewing several relationships as well. SYF became the card issuer of Walgreens co-branded credit card program in the United States. SYF included 36 partners and renewed 38 relationships last year.
In 2021, purchase volume attained a record figure and increased 19.2% from the 2020-end level. For the current year, this financial services company expects solid consumer demand paving the way for broad-based purchase volume growth across several industries and markets it serves.
SYF's CareCredit platform also holds ample growth potential. CareCredit is accepted at more than 9,000 Walgreens and Duane Reade stores and more than 17000 pharmacies across the globe. The segment expanded its capabilities with the buyout of Pets Best insurance. It seeks to provide the same by offering a varied suite of credit cards, commercial credit products and consumer installment loans. Interest income earned from these products remains the primary source of income for SYF.
This apart, SYF boasts a steady capital position. Its solvency position is evident from the total liquidity (liquid assets and undrawn credit facilities) of $15.7 billion, which contained $13 billion of liquid assets. The total liquidity figure equated to 16.4% of total assets. On the back of its balance sheet strength, it also carries out capital deployment to enhance shareholder value. SYF returned $3.4 billion worth of capital during 2021.
SYF has also been taking cost-curbing measures for a while to decrease its operating expenses. As a result, it could successfully decrease expenses 4.5% and 2.3%, respectively, year over year., Synchrony Financial projects quarterly expenses to stay in line with the fourth-quarter 2021 levels.
However, its increasing loan portfolio remains a concern.
Shares of SYF have lost 16.2% in a year’s time, wider than its industry’s decline of 4.9%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks in the finance space are Cantaloupe Inc. (CTLP - Free Report) , WEX Inc. (WEX - Free Report) and Virtu Financial, Inc. (VIRT - Free Report) . While VIRT and CTLP sport a Zacks Rank #1 (Strong Buy), WEX carries a Zacks Rank #2 (Buy) at present.
Cantaloupe is a software and payments company, providing end-to-end technology solutions for the unattended retail market. CTLP came up with a trailing four-quarter surprise of 108.3%, on average.
WEX is a leading provider of payment processing and business solutions across a wide spectrum of sectors, including fleet, travel and healthcare. WEX delivered a trailing four-quarter surprise of 9.96%, on average. Over the past 30 days, WEX has witnessed current-year earnings move 0.6% north.
Virtu Financial is a market-leading financial services firm that leverages cutting-edge technology to provide execution services and data plus analytics and connectivity products to its clients as well as deliver liquidity to the global markets. Earnings of VIRT managed to beat estimates in three of its trailing four quarters (missing the mark in one), the average beat being 24.76%. Over the past 60 days, VIRT has witnessed 2022 earnings estimates move 22.4% north.
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Here's Why You Should Retain Synchrony Financial (SYF) Now
Synchrony Financial (SYF - Free Report) has been in investors’ good books owing to its solid portfolio, several buyouts and alliances, a well-performing CareCredit platform, and a strong financial position. Other factors contributing to this upside are repeat sales, an advanced digital solutions suite and cost-curbing efforts.
Synchrony Financial carries a Zacks Rank #3 (Hold) at present. In 2021, SYF witnessed around 25 million new account originations and a record purchase volume of $166 billion. SYF has a strong pipeline of activities lined up, which poise it well for growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The ROE of Synchrony Financial for the trailing 12 months is 30.8%, which remains higher than the industry average of 22.9%. This reflects SYF’s efficiency in utilizing its shareholders’ funds.
SYF’s earnings beat estimates in each of the trailing four quarters, the average being 18.08%.
This financial services player is constantly making efforts to boost its portfolio. In fact, multiple alliances and buyouts helped the player enhance its digital capabilities as well as diversify its portfolio. Synchrony Financial is constantly renewing several relationships as well. SYF became the card issuer of Walgreens co-branded credit card program in the United States. SYF included 36 partners and renewed 38 relationships last year.
In 2021, purchase volume attained a record figure and increased 19.2% from the 2020-end level. For the current year, this financial services company expects solid consumer demand paving the way for broad-based purchase volume growth across several industries and markets it serves.
SYF's CareCredit platform also holds ample growth potential. CareCredit is accepted at more than 9,000 Walgreens and Duane Reade stores and more than 17000 pharmacies across the globe. The segment expanded its capabilities with the buyout of Pets Best insurance. It seeks to provide the same by offering a varied suite of credit cards, commercial credit products and consumer installment loans. Interest income earned from these products remains the primary source of income for SYF.
This apart, SYF boasts a steady capital position. Its solvency position is evident from the total liquidity (liquid assets and undrawn credit facilities) of $15.7 billion, which contained $13 billion of liquid assets. The total liquidity figure equated to 16.4% of total assets. On the back of its balance sheet strength, it also carries out capital deployment to enhance shareholder value. SYF returned $3.4 billion worth of capital during 2021.
SYF has also been taking cost-curbing measures for a while to decrease its operating expenses. As a result, it could successfully decrease expenses 4.5% and 2.3%, respectively, year over year., Synchrony Financial projects quarterly expenses to stay in line with the fourth-quarter 2021 levels.
However, its increasing loan portfolio remains a concern.
Shares of SYF have lost 16.2% in a year’s time, wider than its industry’s decline of 4.9%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks in the finance space are Cantaloupe Inc. (CTLP - Free Report) , WEX Inc. (WEX - Free Report) and Virtu Financial, Inc. (VIRT - Free Report) . While VIRT and CTLP sport a Zacks Rank #1 (Strong Buy), WEX carries a Zacks Rank #2 (Buy) at present.
Cantaloupe is a software and payments company, providing end-to-end technology solutions for the unattended retail market. CTLP came up with a trailing four-quarter surprise of 108.3%, on average.
WEX is a leading provider of payment processing and business solutions across a wide spectrum of sectors, including fleet, travel and healthcare. WEX delivered a trailing four-quarter surprise of 9.96%, on average. Over the past 30 days, WEX has witnessed current-year earnings move 0.6% north.
Virtu Financial is a market-leading financial services firm that leverages cutting-edge technology to provide execution services and data plus analytics and connectivity products to its clients as well as deliver liquidity to the global markets. Earnings of VIRT managed to beat estimates in three of its trailing four quarters (missing the mark in one), the average beat being 24.76%. Over the past 60 days, VIRT has witnessed 2022 earnings estimates move 22.4% north.