Over the past six months, Synchrony Financial’s stock price fell to $66.59. Shareholders have lost 12.5% of their capital, which is disappointing considering the S&P 500 has climbed by 4.8%. This might have investors contemplating their next move.
Given the weaker price action, is this a buying opportunity for SYF? Find out in our full research report, it’s free.
Why Is Synchrony Financial a Good Business?
Powering over 73 million active accounts and partnerships with major brands like Amazon, PayPal, and Lowe's, Synchrony Financial (NYSE: SYF) provides credit cards, installment loans, and banking products through partnerships with retailers, healthcare providers, and digital platforms.
1. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
Synchrony Financial’s EPS grew at 31.7% compounded annual growth rate over the last five years, higher than its 6.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
2. Growing TBVPS Reflects Strong Asset Base
Tangible book value per share (TBVPS) is a crucial metric that measures the actual value of shareholders’ equity, stripping out goodwill and other intangible assets that may not be recoverable in a worst-case scenario.
Synchrony Financial’s TBVPS increased by 17.4% annually over the last five years, and although its annualized growth has recently decelerated a bit to 15.6% over the last two years (from $27.86 to $37.21 per share), we still think its performance was excellent.
3. Stellar ROE Showcases Lucrative Growth Opportunities
Return on equity (ROE) measures how effectively banks generate profit from each dollar of shareholder equity - a critical funding source. High-ROE institutions typically compound shareholder wealth faster over time through retained earnings, share repurchases, and dividend payments.
Over the last five years, Synchrony Financial has averaged an ROE of 22.8%, exceptional for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows Synchrony Financial has a strong competitive moat.
Final Judgment
These are just a few reasons why Synchrony Financial is a cream-of-the-crop financials company. After the recent drawdown, the stock trades at 7.4× forward P/E (or $66.59 per share). Is now a good time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More Than Synchrony Financial
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
