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

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Investors with an interest in Financial - Miscellaneous Services stocks have likely encountered both Synchrony (SYF - Free Report) and Brookfield Asset Management (BAM - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, Synchrony has a Zacks Rank of #2 (Buy), while Brookfield Asset Management has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SYF has an improving earnings outlook. But this is only part of the picture for value investors.

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 6.74, while BAM has a forward P/E of 25.72. We also note that SYF has a PEG ratio of 0.92. 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. BAM currently has a PEG ratio of 1.46.

Another notable valuation metric for SYF is its 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. By comparison, BAM has a P/B of 1.79.

These metrics, and several others, help SYF earn a Value grade of A, while BAM has been given a Value grade of D.

SYF stands above BAM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SYF is the superior value option right now.


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Brookfield Asset Management Ltd. (BAM) - free report >>

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