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Should Value Investors Buy Synchrony (SYF) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Synchrony (SYF - Free Report) . SYF is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.42 right now. For comparison, its industry sports an average P/E of 15.38. Over the past 52 weeks, SYF's Forward P/E has been as high as 12.30 and as low as 3.16, with a median of 9.88.

Investors will also notice that SYF has a PEG ratio of 0.94. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SYF's industry has an average PEG of 2.14 right now. Over the last 12 months, SYF's PEG has been as high as 2.97 and as low as 0.44, with a median of 1.82.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. SYF has a P/S ratio of 1.32. This compares to its industry's average P/S of 2.41.

These are just a handful of the figures considered in Synchrony's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that SYF is an impressive value stock right now.


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