SYF - Synchrony Financial: Not Too Expensive Yet

2024-07-18 09:28:29 ET

Summary

• Synchrony Financial stock is valued cheaper than peers even near all-time highs. P/E is below peers despite better profitability metrics.
• Consumer spending is starting to slow, but loan balances and interest income are still growing. Late payment rates appear to have peaked.
• Synchrony's common stock remains a Buy. The preferred shares offer safe dividends for more risk-averse investors. Series A is the better preferred to own when rates are falling.

All-Time High Reflects Growing Optimism

I have covered Synchrony Financial ( SYF ) regularly since I started writing for Seeking Alpha in 2019. In the past five years, the stock has made several big moves. It crashed on pandemic concerns in 2020, rallied to all-time highs in 2021 as consumer spending far outpaced expectations at the start of the pandemic, then languished in 2022 and 2023 in anticipation of a recession that never arrived. So far in 2024, the stock is up about 36%, including a 17% return since my last article, " Synchrony Financial: Finally Getting Credit ". ...

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