SYF - Synchrony Financial: Comparing The 2 High Yielding Preferred Shares

2024-06-26 08:31:52 ET

Summary

• Synchrony Financial recently issued a Series B preferred share yielding above 8%.
• Synchrony Financial's profitability has been impacted by higher operating expenses and credit losses.
• Series B preferred shares offer fixed dividends until reset in 2029, with the potential for lower rates in the future.

Introduction

Synchrony Financial ( SYF ) is a depositor bank that specializes in consumer lending. Back in January, I wrote about the income opportunities associated with the bank's Series A preferred shares (SYF.PA) and long-term debt. Since that article, the bank issued Series B preferred shares (SYF.PB) which are currently paying an 8% dividend yield until the rate resets in 2029. Based on the financial health of Synchrony Financial, I think fixed income investors should stick with the Series A preferred shares, but consider the Series B in the event of a selloff....

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