Bread Financial vs Synchrony Financial Which Is a Better Investment?

Bread Financial and Synchrony Financial are two major players in the financial services industry, with a focus on different sectors. Bread Financial is a fintech company that specializes in providing point-of-sale financing solutions for e-commerce merchants, while Synchrony Financial is a traditional financial services company offering consumer banking products and services. Both companies have demonstrated strong growth and profitability in recent years, making their stocks attractive options for investors looking to capitalize on the evolving financial sector landscape.

Bread Financial or Synchrony Financial?

When comparing Bread Financial 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 Bread Financial 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. Bread Financial has a dividend yield of 1.33%, 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. Bread Financial reports a 5-year dividend growth of -18.10% year and a payout ratio of 13.46%. 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 Bread Financial P/E ratio at 10.07 and Synchrony Financial's P/E ratio at 8.42. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Bread Financial P/B ratio is 1.01 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, Bread Financial has seen a 5-year revenue growth of -0.40%, while Synchrony Financial's is 0.02%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Bread Financial's ROE at 10.20% 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 $61.42 for Bread Financial and $66.99 for Synchrony Financial. Over the past year, Bread Financial's prices ranged from $28.00 to $63.25, with a yearly change of 125.89%. Synchrony Financial's prices fluctuated between $34.71 and $69.00, with a yearly change of 98.79%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.