Affirm vs Synchrony Financial Which Is a Smarter Choice?

Affirm and Synchrony Financial are two prominent companies in the financial services industry, each offering unique opportunities for investors. Affirm, a fintech company specializing in providing instant loans and flexible payment options, has seen rapid growth due to the increasing popularity of buy-now-pay-later services. On the other hand, Synchrony Financial is a traditional financial institution with a focus on consumer finance, offering credit cards and savings products. Investors should carefully consider the strengths and weaknesses of each company before making investment decisions.

Affirm or Synchrony Financial?

When comparing Affirm and Synchrony Financial, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Affirm and Synchrony Financial.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Affirm has a dividend yield of -%, while Synchrony Financial has a dividend yield of 1.47%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Affirm reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Synchrony Financial reports a 5-year dividend growth of 5.92% year and a payout ratio of 14.72%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Affirm P/E ratio at -50.42 and Synchrony Financial's P/E ratio at 8.44. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Affirm P/B ratio is 7.93 while Synchrony Financial's P/B ratio is 1.67.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Affirm has seen a 5-year revenue growth of 4.24%, while Synchrony Financial's is 0.02%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Affirm's ROE at -16.49% and Synchrony Financial's ROE at 20.85%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $67.78 for Affirm and $67.71 for Synchrony Financial. Over the past year, Affirm's prices ranged from $22.25 to $72.82, with a yearly change of 227.28%. Synchrony Financial's prices fluctuated between $35.29 and $69.39, with a yearly change of 96.62%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.