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

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Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either Synchrony (SYF - Free Report) or Axos Financial (AX - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Synchrony has a Zacks Rank of #2 (Buy), while Axos Financial has a Zacks Rank of #4 (Sell) right now. 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. However, value investors will care about much more than just this.

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 9.20, while AX has a forward P/E of 11.79. We also note that SYF has a PEG ratio of 0.89. 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. AX currently has a PEG ratio of 1.18.

Another notable valuation metric for SYF is its P/B ratio of 1.61. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, AX has a P/B of 2.36.

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

SYF sticks out from AX in both our Zacks Rank and Style Scores models, so value investors will likely feel that SYF is the better option right now.


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