Back to top

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

Read MoreHide Full Article

Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either Synchrony (SYF - Free Report) or Virtu Financial (VIRT - 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.

Synchrony and Virtu Financial are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that SYF's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

SYF currently has a forward P/E ratio of 7.91, while VIRT has a forward P/E of 15.45. We also note that SYF has a PEG ratio of 0.76. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. VIRT currently has a PEG ratio of 3.09.

Another notable valuation metric for SYF is its P/B ratio of 1.42. 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, VIRT has a P/B of 3.43.

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

SYF is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that SYF is likely 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 >>

Virtu Financial, Inc. (VIRT) - free report >>

Published in