Are Investors Undervaluing Synchrony (SYF) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Synchrony (SYF). SYF is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 7.94 right now. For comparison, its industry sports an average P/E of 10.17. Over the past 52 weeks, SYF's Forward P/E has been as high as 15.25 and as low as 7.50, with a median of 9.73.
SYF is also sporting 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. SYF's PEG compares to its industry's average PEG of 1.06. SYF's PEG has been as high as 1.99 and as low as 0.60, with a median of 1.13, all within the past year.
Another notable valuation metric for SYF is its P/B ratio of 1.61. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. SYF's current P/B looks attractive when compared to its industry's average P/B of 2.04. Within the past 52 weeks, SYF's P/B has been as high as 2.18 and as low as 1.48, with a median of 1.80.
Finally, our model also underscores that SYF has a P/CF ratio of 9.35. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. SYF's current P/CF looks attractive when compared to its industry's average P/CF of 9.81. Over the past year, SYF's P/CF has been as high as 14.40 and as low as 8.59, with a median of 11.25.
These are just a handful of the figures considered in Synchrony'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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