Synchrony (SYF) Up 16% in 6 Months: More Room to Run?
Shares of Synchrony Financial SYF have gained 16.2% in the past six months against the industry’s 3.6% decline. The Finance sector and the S&P 500 composite index rose 3.4% and 0.2%, respectively, in the same time frame. With a market capitalization of $14.7 billion, the average volume of shares traded in the last three months was 5.5 million.
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Several buyouts and alliances, a well-performing CareCredit platform, and a strong financial position continue to drive Synchrony.
The leading U.S. consumer financial services provider, with a Zacks Rank #3 (Hold) at present, has a solid record of beating estimates in each of the trailing seven quarters.
Can SYF Retain the Momentum?
Synchrony remains on a spree to undertake numerous growth-related initiatives, ranging from acquisitions and partnerships to the renewal of alliances with well-established retailers and manufacturers. These efforts, in turn, are expected to diversify its product suite and solidify its nationwide foothold.
Some of the notable growth efforts undertaken by SYF in the fourth quarter of 2022 so far include partnering with Dutch to offer an upgraded pet insurance plan and expanding its tie-up with Belk to provide customers greater purchasing flexibility.
This year, a rebounding economy, resulting in improved consumer spending, is expected to lead to broad-based purchase volume growth for SYF across several industries and the markets it caters to.
Synchrony boasts a solid digital arm that has been developed through partnerships with tech giants and significant investments. Advanced digital capabilities empower SYF to ease financing at the point of sale and offer seamless shopping experiences to customers.
The company keeps an eye to expand its CareCredit platform for which it resorted to acquiring Pets Best Insurance, and partnering with Medofficedirect and Thrive Pet Healthcare.
A strong financial position, substantiated by growing cash reserves, enables Synchrony to service short-term debt obligations. The financial strength also equips SYF to prudently deploy capital via share buybacks and dividend payments. Its return on equity stands at 25.6% as of Sep 30, 2022, ahead of the industry average of 19.9%. This denotes efficiency in utilizing shareholders’ funds.
Synchrony boasts an impressive VGM Score of A. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Stocks to Consider
Some better-ranked stocks in the Finance space are Fidus Investment Corporation FDUS, Capital Southwest Corporation CSWC and Hancock Whitney Corporation HWC. While Fidus Investment currently sports a Zacks Rank #1 (Strong Buy), Capital Southwest and Hancock Whitney carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fidus Investment’s earnings surpassed estimates in each of the trailing four quarters, the average being 17.83%. The Zacks Consensus Estimate for FDUS’s 2022 earnings suggests an improvement of 6.8% from the year-ago reported figure, while the same for revenues suggests growth of 3.3%. The consensus mark for FDUS’s 2022 earnings has moved 9.2% north in the past 60 days.
The bottom line of Capital Southwest beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 3.22%. The Zacks Consensus Estimate for CSWC’s 2022 earnings suggests an improvement of 17.1% from the year-ago reported figure, while the same for revenues suggests growth of 33.1%. The consensus mark for CSWC’s 2022 earnings has moved 0.5% north in the past 30 days.
Hancock Whitney’s earnings outpaced estimates in three of the last four quarters and met the mark once, the average surprise being 5.23%. The Zacks Consensus Estimate for HWC’s 2022 earnings suggests an improvement of 7.8% from the year-ago reported figure, while the same for revenues suggests growth of 7.5%. The consensus mark for HWC’s 2022 earnings has moved 0.5% north in the past 60 days.
Shares of Fidus Investment and Hancock Whitney have gained 8.5% and 8%, respectively, in the past six months. However, the Capital Southwest stock has lost 8.5% in the same time frame.
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Synchrony Financial (SYF) : Free Stock Analysis Report
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