Synchrony Financial: A Buy, Even After Factoring In The Asset Quality Concerns

Summary Points:

- Synchrony Financial's stock has been under-pressure over the last year due to asset quality concerns but SYF shares are now trading at an attractive valuation.

- Based on estimated 2018 and 2019 earnings, SYF shares are trading at a steep discount to its 'peer' group.

- Synchrony Financial is a long-term buy.

Synchrony Financial ($SYF) is a private-label credit card company that has largely flown under the radar since going public in mid-2014 but, more recently, this company has been getting a lot of attention in large part due to the fact that Warren Buffett's Berkshire Hathaway ($BRK.A) ($BRK.B) initiated a small (but growing) position. Looking back, SYF shares have performed well over the last three plus years.

Concerns related to the asset quality of the company's portfolio has caused downward pressure for the stock over the last year, but I believe that the risks have been overblown and that Synchrony is now worthy of investment dollars.