Investors interested in Financial - Miscellaneous Services stocks are likely familiar with Synchrony (SYF) and Brookfield Asset Management (BAM). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Synchrony is sporting a Zacks Rank of #1 (Strong Buy), while Brookfield Asset Management has a Zacks Rank of #2 (Buy). This means that SYF's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
SYF currently has a forward P/E ratio of 10, while BAM has a forward P/E of 37.70. We also note that SYF has a PEG ratio of 0.90. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BAM currently has a PEG ratio of 2.28.
Another notable valuation metric for SYF is its P/B ratio of 1.72. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, BAM has a P/B of 7.60.
These are just a few of the metrics contributing to SYF's Value grade of A and BAM's Value grade of D.
SYF sticks out from BAM in both our Zacks Rank and Style Scores models, so value investors will likely feel that SYF is the better option right now.
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