Synchrony Financial (NYSE:SYF): Ex-Dividend Is In 3 Days, Should You Buy?
On the 17 May 2018, Synchrony Financial (NYSE:SYF) will be paying shareholders an upcoming dividend amount of $0.15 per share. However, investors must have bought the company’s stock before 04 May 2018 in order to qualify for the payment. That means you have only 3 days left! Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Synchrony Financial’s latest financial data to analyse its dividend attributes. Check out our latest analysis for Synchrony Financial
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
Is its annual yield among the top 25% of dividend-paying companies?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has it increased its dividend per share amount over the past?
Does earnings amply cover its dividend payments?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does Synchrony Financial fare?
The company currently pays out 21.88% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. However, going forward, analysts expect SYF’s payout to fall to 19.00% of its earnings, which leads to a dividend yield of 2.29%. However, EPS should increase to $3.6, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Unfortunately, it is really too early to view Synchrony Financial as a dividend investment. It has only been consistently paying dividends for 2 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Relative to peers, Synchrony Financial has a yield of 1.81%, which is high for Consumer Finance stocks but still below the market’s top dividend payers.
Next Steps:
Taking all the above into account, Synchrony Financial is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. I’ve put together three pertinent factors you should further examine:
Future Outlook: What are well-informed industry analysts predicting for SYF’s future growth? Take a look at our free research report of analyst consensus for SYF’s outlook.
Valuation: What is SYF worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether SYF is currently mispriced by the market.
Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
