Synchrony Financial Return On Asset vs. Price To Earning

SYF Stock  USD 68.53  1.66  2.48%   
Taking into consideration Synchrony Financial's profitability measurements, Synchrony Financial's profitability may be sliding down. It has an above-average chance of reporting lower numbers next quarter. Profitability indicators assess Synchrony Financial's ability to earn profits and add value for shareholders. The Synchrony Financial's current Price To Sales Ratio is estimated to increase to 2.26. The Synchrony Financial's current EV To Sales is estimated to increase to 3.39. At this time, Synchrony Financial's Net Income is most likely to increase significantly in the upcoming years. The Synchrony Financial's current Income Tax Expense is estimated to increase to about 870.3 M, while Total Other Income Expense Net is projected to decrease to (797 M).
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.991.05
Notably Down
Slightly volatile
Net Profit Margin0.180.2921
Way Down
Pretty Stable
Operating Profit Margin0.450.4781
Notably Down
Pretty Stable
Pretax Profit Margin0.260.379
Way Down
Very volatile
Return On Assets0.03120.0191
Way Up
Slightly volatile
Return On Equity0.250.161
Way Up
Slightly volatile
For Synchrony Financial profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Synchrony Financial to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Synchrony Financial utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Synchrony Financial's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Synchrony Financial over time as well as its relative position and ranking within its peers.
  
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For more detail on how to invest in Synchrony Stock please use our How to Invest in Synchrony Financial guide.
Is Consumer Finance space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Synchrony Financial. If investors know Synchrony will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Synchrony Financial listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
0.311
Dividend Share
1
Earnings Share
7.7
Revenue Per Share
22.405
Quarterly Revenue Growth
0.116
The market value of Synchrony Financial is measured differently than its book value, which is the value of Synchrony that is recorded on the company's balance sheet. Investors also form their own opinion of Synchrony Financial's value that differs from its market value or its book value, called intrinsic value, which is Synchrony Financial's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Synchrony Financial's market value can be influenced by many factors that don't directly affect Synchrony Financial's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Synchrony Financial's value and its price as these two are different measures arrived at by different means. Investors typically determine if Synchrony Financial is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Synchrony Financial's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Synchrony Financial Price To Earning vs. Return On Asset Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Synchrony Financial's current stock value. Our valuation model uses many indicators to compare Synchrony Financial value to that of its competitors to determine the firm's financial worth.
Synchrony Financial is rated fourth in return on asset category among its peers. It is rated below average in price to earning category among its peers reporting about  213.55  of Price To Earning per Return On Asset. Comparative valuation analysis is a catch-all technique that is used if you cannot value Synchrony Financial by discounting back its dividends or cash flows. It compares the stock's price multiples to nearest competition to determine if the stock is relatively undervalued or overvalued.

Synchrony Price To Earning vs. Return On Asset

Return on Asset or ROA shows how effective is the management of the company in generating income from utilizing all of the assets at their disposal. It is a useful ratio to evaluate the performance of different departments of a company as well as to understand management performance over time.

Synchrony Financial

Return On Asset

 = 

Net Income

Total Assets

 = 
0.0273
Return on Asset measures overall efficiency of a company in generating profits from its total assets. It is expressed as the percentage of profits earned per dollar of Asset. A low ROA typically means that a company is asset-intensive and therefore will needs more money to continue generating revenue in the future.
Price to Earnings ratio is typically used for current valuation of a company and is one of the most popular ratios that investors monitor daily. Holding a low PE stock is less risky because when a company's profitability falls, it is likely that earnings will also go down as well. In other words, if you start from a lower position, your downside risk is limited. There are also some investors who believe that low Price to Earnings ratio reflects the low pricing because a given company is in trouble. On the other hand, a higher PE ratio means that investors are paying more for each unit of profit.

Synchrony Financial

P/E

 = 

Market Value Per Share

Earnings Per Share

 = 
5.83 X
Generally speaking, the Price to Earnings ratio gives investors an idea of what the market is willing to pay for the company's current earnings.

Synchrony Price To Earning Comparison

Synchrony Financial is currently under evaluation in price to earning category among its peers.

Synchrony Financial Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Synchrony Financial, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Synchrony Financial will eventually generate negative long term returns. The profitability progress is the general direction of Synchrony Financial's change in net profit over the period of time. It can combine multiple indicators of Synchrony Financial, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income-68 M-71.4 M
Operating Income3.7 B4.8 B
Income Before Tax2.9 B3.9 B
Total Other Income Expense Net-759 M-797 M
Net Income2.2 B2.7 B
Income Tax Expense666 M870.3 M
Net Income Applicable To Common Shares3.4 B2.8 B
Net Income From Continuing Ops2.2 B3.1 B
Net Interest Income17 B16.5 B
Interest Income20.7 B18.4 B
Change To Netincome2.7 BB
Net Income Per Share 5.31  2.99 
Income Quality 3.84  2.48 
Net Income Per E B T 0.77  0.55 

Synchrony Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Synchrony Financial. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Synchrony Financial position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Synchrony Financial's important profitability drivers and their relationship over time.

Use Synchrony Financial in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Synchrony Financial position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Synchrony Financial will appreciate offsetting losses from the drop in the long position's value.

Synchrony Financial Pair Trading

Synchrony Financial Pair Trading Analysis

The ability to find closely correlated positions to Synchrony Financial could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Synchrony Financial when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Synchrony Financial - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Synchrony Financial to buy it.
The correlation of Synchrony Financial is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Synchrony Financial moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Synchrony Financial moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Synchrony Financial can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Synchrony Financial position

In addition to having Synchrony Financial in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

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Funds or Etfs investing in real estate backed instruments or issues backed by different types of commercial properties. The Realty Funds theme has 45 constituents at this time.
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When determining whether Synchrony Financial is a strong investment it is important to analyze Synchrony Financial's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Synchrony Financial's future performance. For an informed investment choice regarding Synchrony Stock, refer to the following important reports:
Check out World Market Map.
For more detail on how to invest in Synchrony Stock please use our How to Invest in Synchrony Financial guide.
You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
To fully project Synchrony Financial's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Synchrony Financial at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Synchrony Financial's income statement, its balance sheet, and the statement of cash flows.
Potential Synchrony Financial investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Synchrony Financial investors may work on each financial statement separately, they are all related. The changes in Synchrony Financial's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Synchrony Financial's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.