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Synchrony Financial Will Be Added To The S&P 500, And It Should Also Be Added To Your Watch List

On November 17, 2015, Synchrony will replace Genworth Financial in the S&P 500.

Synchrony recently reported impressive Q3 2015 results, and the company also released the details for the final split-off.

Prospective investors should be adding Synchrony to their watch lists, and current investors should be buying the dips.

It was announced that Synchrony Financial (NYSE:SYF) would be added to the S&P 500, and that the company would be replacing the former GE unit Genworth Financial (NYSE:GNW). Should SYF now be added to investors' watch lists? Yes, and I will explain why.

I recently wrote about Synchrony's Q3 2015 earnings results, and described how this company was currently a great long-term buy. At Q3 2015, the company reported earnings per share ("EPS) of $0.69, which beat the consensus estimate of $0.66.

At Q3 2015, the company increased its top-line revenue by ~8% year-over-year ("YoY") while the earnings declined ~1% YoY. The current period earnings were negatively impacted by the expense build related to the separation from its parent company General Electric (NYSE:GE) [see this article for further thoughts on this topic] and the decline in the EPS is a direct result of an increase in shares from the IPO (net earnings actually increased from $548 million at Q3 2014 to $574 million at Q3 2015).

My focus in this article will be on Synchrony's current valuation and long-term prospects and not the details of the upcoming exchange...


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