2024-01-23 22:36:51 ET
Summary
- Synchrony Financial's preferred shares and longest-dated debt are still trading at attractive yields, making them good buys for income investors.
- The bank's unique business model allows it to borrow money at low interest rates and lend it out at high interest rates, giving it a competitive advantage.
- Despite the rise in borrowing costs, SYF's interest rate spread and net interest income remain above pandemic levels, indicating effective capital deployment.
Synchrony Financial ( SYF ), a bank that specializes in consumer loans, announced its fourth quarter earnings on Tuesday. Last May, I wrote about how Synchrony's long-term debt, which yielded above 9% at the time, was a good investment. In November, I examined Synchrony's preferred shares (SYF.PR.A) which also yielded nearly 9%. While each of these investments has rallied in price, the company's preferred shares are still trading at an 8% yield and the longest-dated debt is trading at a 7.55% yield to maturity. Each of these fixed investments is still a good buy for income investors....
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Synchrony Financial Offers 2 Good Income Options