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Synchrony Financial (SYF)

Company Dividend Discount ModelIndustry: Financial - Credit ServicesSector: Financial Services

Valuation Snapshot

Stable Growth$65.48 - $94.24$79.52
Multi-Stage$103.85 - $114.18$108.91
Blended Fair Value$94.22
Current Price$71.05
Upside32.60%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS-7.29%0.00%1.031.051.131.301.351.511.381.160.550.00
YoY Growth---1.97%-6.45%-13.20%-3.85%-10.50%8.80%19.73%108.41%0.00%0.00%
Dividend Yield--1.95%2.52%3.87%3.72%3.32%9.36%4.25%3.45%1.62%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)3,575.00
(-) Cash Dividends Paid (M)499.00
(=) Cash Retained (M)3,076.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)715.00446.88268.13
Cash Retained (M)3,076.003,076.003,076.00
(-) Cash Required (M)-715.00-446.88-268.13
(=) Excess Retained (M)2,361.002,629.132,807.88
(/) Shares Outstanding (M)385.68385.68385.68
(=) Excess Retained per Share6.126.827.28
LTM Dividend per Share1.291.291.29
(+) Excess Retained per Share6.126.827.28
(=) Adjusted Dividend7.428.118.57
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Fair Value$65.48$79.52$94.24
Upside / Downside-7.84%11.92%32.64%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)3,575.003,539.253,503.863,468.823,434.133,399.793,501.78
Payout Ratio13.96%29.17%44.37%59.58%74.79%90.00%92.50%
Projected Dividends (M)499.001,032.271,554.832,066.832,568.443,059.813,239.15

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)936.63946.19955.75
Year 2 PV (M)1,280.061,306.321,332.84
Year 3 PV (M)1,543.931,591.681,640.40
Year 4 PV (M)1,740.871,813.021,887.39
Year 5 PV (M)1,881.761,979.752,081.78
PV of Terminal Value (M)32,667.3634,368.4236,139.62
Equity Value (M)40,050.6242,005.3844,037.78
Shares Outstanding (M)385.68385.68385.68
Fair Value$103.85$108.91$114.18
Upside / Downside46.16%53.29%60.71%

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