Synchrony Financial (SYF) stock analysis

P/E above its 5-year median

Synchrony Financial's P/E of 7.5 is above its own 5-year median of 6.8.

P/E below the industry

Synchrony Financial's P/E of 7.5 is below the Finance services median of 11.8.

EV/EBITDA against its history

Needs positive EBITDA and price history.

P/B above the industry

Synchrony Financial's price-to-book of 1.36 is above the Finance services median of 0.83.

Trading below fair value

The share price of $72.02 is below our fair value estimate of $82.76.

Margin of safety under 20%

The price is 13.0% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 5.9% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 14.7% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -6.8% over the last twelve months, against a 5-year average of 20.7% a year.

Growing slower than the industry

Revenue grew 2.6% over the last twelve months; the Finance services median is 9.8%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

This company does not report gross profit.

Return on equity over 15%

Return on equity was 19.8% over the last twelve months and averaged 23.1% over five years.

Return on invested capital

Needs operating income and invested capital.

Return on equity above the industry

Synchrony Financial's return on equity of 19.8% is above the Finance services median of -33.5%.

Earnings grew over 5 years

Net income grew 20.7% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 17.3% over the last twelve months, against a 5-year average of 19.4%.

Net margin above the industry

Synchrony Financial's net margin of 17.3% is above the Finance services median of -64.5%.

No debt

Synchrony Financial has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term liquidity

The balance sheet is not split into current and non-current items.

Elevated bankruptcy risk

The Altman Z-score is 0.59; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Synchrony Financial paid dividends worth 1.3% of the share price over the last twelve months.

Yield below Treasuries

The 1.3% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Synchrony Financial yields 1.3%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 12.6% of net income.

Cash-flow cover

Needs dividends paid and free cash flow.