RBC Capital Downgrades Synchrony Financial

Fintel reports that on September 5, 2023, RBC Capital downgraded their outlook for Synchrony Financial (NYSE:SYF) from Outperform to Sector Perform.

Analyst Price Forecast Suggests 22.72% Upside

As of August 31, 2023, the average one-year price target for Synchrony Financial is 40.08. The forecasts range from a low of 29.29 to a high of $57.75. The average price target represents an increase of 22.72% from its latest reported closing price of 32.66.

See our leaderboard of companies with the largest price target upside.

The projected annual revenue for Synchrony Financial is 16,794MM, an increase of 118.16%. The projected annual non-GAAP EPS is 5.16.

Synchrony Financial Declares $0.25 Dividend

On July 20, 2023 the company declared a regular quarterly dividend of $0.25 per share ($1.00 annualized). Shareholders of record as of July 31, 2023 received the payment on August 10, 2023. Previously, the company paid $0.23 per share.

At the current share price of $32.66 / share, the stock’s dividend yield is 3.06%.

Looking back five years and taking a sample every week, the average dividend yield has been 2.73%, the lowest has been 1.70%, and the highest has been 6.88%. The standard deviation of yields is 0.76 (n=236).

The current dividend yield is 0.43 standard deviations above the historical average.

Additionally, the company’s dividend payout ratio is 0.17. The payout ratio tells us how much of a company’s income is paid out in dividends. A payout ratio of one (1.0) means 100% of the company’s income is paid in a dividend. A payout ratio greater than one means the company is dipping into savings in order to maintain its dividend – not a healthy situation. Companies with few growth prospects are expected to pay out most of their income in dividends, which typically means a payout ratio between 0.5 and 1.0. Companies with good growth prospects are expected to retain some earnings in order to invest in those growth prospects, which translates to a payout ratio of zero to 0.5.

The company’s 3-Year dividend growth rate is 0.14%, demonstrating that it has increased its dividend over time.

What is the Fund Sentiment?

There are 1395 funds or institutions reporting positions in Synchrony Financial. This is a decrease of 52 owner(s) or 3.59% in the last quarter. Average portfolio weight of all funds dedicated to SYF is 0.19%, a decrease of 5.86%. Total shares owned by institutions decreased in the last three months by 0.92% to 457,557K shares. The put/call ratio of SYF is 0.89, indicating a bullish outlook.

What are Other Shareholders Doing?

Capital World Investors holds 45,088K shares representing 10.78% ownership of the company. No change in the last quarter.

Bank Of America holds 29,820K shares representing 7.13% ownership of the company. In it’s prior filing, the firm reported owning 16,736K shares, representing an increase of 43.88%. The firm increased its portfolio allocation in SYF by 731.60% over the last quarter.

ABALX – AMERICAN BALANCED FUND holds 22,145K shares representing 5.30% ownership of the company. No change in the last quarter.

VTSMX – Vanguard Total Stock Market Index Fund Investor Shares holds 13,282K shares representing 3.18% ownership of the company. In it’s prior filing, the firm reported owning 13,498K shares, representing a decrease of 1.63%. The firm increased its portfolio allocation in SYF by 5.90% over the last quarter.

AMECX – INCOME FUND OF AMERICA holds 11,303K shares representing 2.70% ownership of the company. No change in the last quarter.

Synchrony Financial Background Information
(This description is provided by the company.)

Synchrony is a premier consumer financial services company. The Company delivers a wide range of specialized financing programs, as well as innovative consumer banking products, across key industries including digital, retail, home, auto, travel, health and pet. Synchrony enables its partners to grow sales and loyalty with consumers. It’s one of the largest issuers of private label credit cards in the United States; it also offers co-branded products, installment loans and consumer financing products for small- and medium-sized businesses, as well as healthcare providers.

This article originally appeared on Fintel

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