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Date of Investment

April 15, 2021

Price Target


Invested or Exited?


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Synchrony Financials


Company Information

Synchrony Financial engages in the provision of consumer financial services. It operates through three sales platforms: Retail Card, Payment Solutions, and CareCredit. The Retail Card platform is a provider of private label credit cards, and also provides Dual Cards and small-and medium-sized business credit products. The Payment Solutions platform is a provider of promotional financing for major consumer purchases, offering private label credit cards and installment loans. The CareCredit platform is a provider of promotional financing to consumers for elective healthcare procedures or services, such as dental, veterinary, cosmetic, vision and audiology. The company was founded on September 12, 2003 and is headquartered in Stamford, CT.

Executive Summary

Investment Thesis: Synchrony Financial is a quickly growing consumer financial services that capitalizes on the growth of the tech industry over the past few years. As a leading provider in the private credit card industry, increases in spending as pandemic restrictions ease should boost Synchrony’s profits. They also hold an industry leading net interest margin, which will further boost them above their competitors. Coupled with their above average valuation numbers and good risk management, Synchrony is a great pick to invest in for the future.

Investment Merits: 

Largest provider of private label credit cards in the U.S.

  • Increase in spending trends during COVID recovery

  • High net interest margin

  • Synchrony has a NIM of 15%, while the average U.S. bank’s NIM is 2.8%

  • Fast growth

  • Earnings passed pre-pandemic levels in Q4 2020

  • Revenue growth at 25.78% for Q4 2020 compared to sector average of 10.12%

  • 25 new deals in 2020

  • Amazon, Paypal, Venmo, Walgreens, and Verizon

  • Digitally adapted

  • SyPI: allows customers to apply for credit, make payments,and  check account information within five minutes

  • Alexa voice payments

  • Setpay: small loans customers can pay off through monthly payments

  • CareCredit

  • Healthcare credit card that helps with debt management

  • Consistent dividends throughout pandemic

  • $0.22 per share

Investment Risks: 

Retail agreements last 5-10 years

  • 11 expire before 2025

  • The other 14 partnerships comprise nearly 90% of the company’s annual interest and fees on loans

  • 3.07% delinquency rate

  • Exceeds average major bank delinquency rate of 2.12%

  • Rate has been decreasing over time

  • Forbearance program in effect until December 2021

  • 10.7% drop in purchase volume due to government restrictions

  • Should ease as time goes on


Buy 20 shares at current price.

Industry Group Analysts

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