SYF or AXP: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either Synchrony (SYF) or American Express (AXP). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Synchrony and American Express are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), 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 factor that value investors are interested in.
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 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 7.44, while AXP has a forward P/E of 19.72. We also note that SYF has a PEG ratio of 0.36. 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. AXP currently has a PEG ratio of 0.99.
Another notable valuation metric for SYF is its P/B ratio of 2.10. 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, AXP has a P/B of 5.44.
These are just a few of the metrics contributing to SYF's Value grade of A and AXP's Value grade of C.
SYF sticks out from AXP in both our Zacks Rank and Style Scores models, so value investors will likely feel that SYF is the better option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Synchrony Financial (SYF) : Free Stock Analysis Report
American Express Company (AXP) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
