Back to top

Image: Bigstock

SYF or LU: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors with an interest in Financial - Miscellaneous Services stocks have likely encountered both Synchrony (SYF - Free Report) and Lufax Holding Ltd. Sponsored ADR (LU - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Synchrony and Lufax Holding Ltd. Sponsored ADR are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

SYF currently has a forward P/E ratio of 8.69, while LU has a forward P/E of 15.40. We also note that SYF has a PEG ratio of 0.97. 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. LU currently has a PEG ratio of 1.14.

Another notable valuation metric for SYF is its P/B ratio of 1.96. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, LU has a P/B of 2.94.

These are just a few of the metrics contributing to SYF's Value grade of A and LU's Value grade of D.

Both SYF and LU are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that SYF is the superior value option right now.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Synchrony Financial (SYF) - free report >>

Lufax Holding Ltd. Sponsored ADR (LU) - free report >>

Published in