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Are Investors Undervaluing Synchrony Financial (SYF) Right Now?
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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 stock to keep an eye on is Synchrony Financial (SYF - Free Report) . SYF is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 6.99. This compares to its industry's average Forward P/E of 12.96. Over the past 52 weeks, SYF's Forward P/E has been as high as 7.45 and as low as 5.20, with a median of 6.30.
We also note that SYF holds a PEG ratio of 0.95. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SYF's industry has an average PEG of 1.41 right now. Over the last 12 months, SYF's PEG has been as high as 1.78 and as low as 0.29, with a median of 1.41.
Another valuation metric that we should highlight is SYF's P/B ratio of 1.24. 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. This company's current P/B looks solid when compared to its industry's average P/B of 2.20. SYF's P/B has been as high as 1.40 and as low as 0.87, with a median of 1.09, over the past year.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SYF has a P/S ratio of 0.78. This compares to its industry's average P/S of 1.8.
Finally, our model also underscores that SYF has a P/CF ratio of 6.14. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. SYF's current P/CF looks attractive when compared to its industry's average P/CF of 14.49. Within the past 12 months, SYF's P/CF has been as high as 6.14 and as low as 3.66, with a median of 4.67.
These are just a handful of the figures considered in Synchrony Financial'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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Are Investors Undervaluing Synchrony Financial (SYF) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 stock to keep an eye on is Synchrony Financial (SYF - Free Report) . SYF is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 6.99. This compares to its industry's average Forward P/E of 12.96. Over the past 52 weeks, SYF's Forward P/E has been as high as 7.45 and as low as 5.20, with a median of 6.30.
We also note that SYF holds a PEG ratio of 0.95. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SYF's industry has an average PEG of 1.41 right now. Over the last 12 months, SYF's PEG has been as high as 1.78 and as low as 0.29, with a median of 1.41.
Another valuation metric that we should highlight is SYF's P/B ratio of 1.24. 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. This company's current P/B looks solid when compared to its industry's average P/B of 2.20. SYF's P/B has been as high as 1.40 and as low as 0.87, with a median of 1.09, over the past year.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SYF has a P/S ratio of 0.78. This compares to its industry's average P/S of 1.8.
Finally, our model also underscores that SYF has a P/CF ratio of 6.14. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. SYF's current P/CF looks attractive when compared to its industry's average P/CF of 14.49. Within the past 12 months, SYF's P/CF has been as high as 6.14 and as low as 3.66, with a median of 4.67.
These are just a handful of the figures considered in Synchrony Financial'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.