Investors with an interest in Financial - Miscellaneous Services stocks have likely encountered both Synchrony (SYF) and Blackstone Inc. (BX). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, both Synchrony and Blackstone Inc. are sporting a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
SYF currently has a forward P/E ratio of 9.15, while BX has a forward P/E of 36.79. We also note that SYF has a PEG ratio of 0.77. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BX currently has a PEG ratio of 1.49.
Another notable valuation metric for SYF is its P/B ratio of 1.8. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, BX has a P/B of 6.85.
These metrics, and several others, help SYF earn a Value grade of A, while BX has been given a Value grade of D.
Both SYF and BX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that SYF is the superior value option right now.
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Synchrony Financial (SYF): Free Stock Analysis Report Blackstone Inc. (BX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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