Back to top

Image: Bigstock

SYF vs. BX: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors interested in Financial - Miscellaneous Services stocks are likely familiar with Synchrony (SYF - Free Report) and Blackstone Inc. (BX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Synchrony has a Zacks Rank of #2 (Buy), while Blackstone Inc. has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SYF is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

SYF currently has a forward P/E ratio of 6.35, while BX has a forward P/E of 27.47. We also note that SYF has a PEG ratio of 1.43. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BX currently has a PEG ratio of 2.08.

Another notable valuation metric for SYF is its P/B ratio of 1.06. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, BX has a P/B of 4.65.

Based on these metrics and many more, SYF holds a Value grade of A, while BX has a Value grade of F.

SYF has seen stronger estimate revision activity and sports more attractive valuation metrics than BX, so it seems like value investors will conclude that SYF is the superior option right now.


See More Zacks Research for These Tickers


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


Blackstone Inc. (BX) - free report >>

Synchrony Financial (SYF) - free report >>

Published in