Synchrony Financial (SYF) vs Visa Inc. (V): Which Is the Better Buy in 2026?
As of 2026-11-01, SYF is undervalued at $75, with a DCF intrinsic value of $264 and a margin of safety of 71%. V is overvalued at $414, with an intrinsic value of $328 and a margin of safety of -26%. Of the two, SYF has the wider margin of safety.
Rewards
- ★Free cash flow has grown at a 13.7% CAGR over the past 4 years, demonstrating strong earnings power growth.
- ★Share count has been reduced by 21% over the past 4 years through buybacks, increasing each share's claim on earnings.
- ★PEG ratio of 0.93 suggests the stock is undervalued relative to its growth rate — paying less than 1x for each unit of earnings growth.
- ★Visa Inc. has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★Gross margin of 97.7% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Visa Inc. scores 99/100 on the Economic Moat Score (Wide Moat), with roic consistency as the strongest competitive dimension.
Risks
- ⚠Gross margin of 0.0% is low, suggesting a competitive or commodity-like market with limited pricing power.
- ⚠Altman Z-Score of 0.58 places the company in the distress zone — financial patterns resemble those of companies that experienced bankruptcy.
- ⚠FCF yield of 2.7% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠5 insider sales totaling $12.5M with no purchases in the past 3 months — insiders are reducing their exposure.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →Requires positive FCF to compute implied growth rate.
What growth rate is the market pricing in at $414?
The market implies +16.8% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +16.1%, reflecting heavy growth investment.
Economic Moat Score
Learn more →Narrow moat with revenue predictability as the key competitive advantage. Improving reinvestment efficiency would strengthen the moat.
Wide moat with strength across all dimensions. ROIC Consistency is the standout factor.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is pricing this stock without strong emotion in either direction"
"Market is optimistic — be cautious and ensure you have a margin of safety"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: SYF vs V
Is Synchrony Financial or Visa Inc. more undervalued in 2026?▼
Based on our discounted cash flow model, SYF trades at a 71.4% margin of safety (intrinsic value $264 vs. price $75), compared to V's -26.1% margin of safety (intrinsic $328 vs. $414).
Which stock has a wider economic moat, Synchrony Financial or Visa Inc.?▼
V scores 99/100 (Wide moat), while SYF scores 65/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is Synchrony Financial in financial distress?▼
SYF's Altman Z-Score of 0.6 places it in the Distress zone, signaling elevated bankruptcy risk. V scores 8.1 (Safe zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.
Which stock has higher return on invested capital, Synchrony Financial or Visa Inc.?▼
V earns 39.7% ROIC versus SYF's 22.6%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, Synchrony Financial's or Visa Inc.'s?▼
V's dividend earns a safety score of 94/100 (Very Safe), compared to SYF's 94/100 (Very Safe). V has raised its dividend for 3 consecutive years.