Yahoo Finance FI vs. EFX: Which Stock Is the Better Value Option?
Investors interested in stocks from the Financial Transaction Services sector have probably already heard of Fiserv (FI) and Equifax (EFX). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Fiserv has a Zacks Rank of #2 (Buy), while Equifax has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that FI has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
FI currently has a forward P/E ratio of 17.13, while EFX has a forward P/E of 32.50. We also note that FI has a PEG ratio of 1.20. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. EFX currently has a PEG ratio of 1.71.
Another notable valuation metric for FI is its P/B ratio of 2.96. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, EFX has a P/B of 6.47.
Based on these metrics and many more, FI holds a Value grade of B, while EFX has a Value grade of C.
FI has seen stronger estimate revision activity and sports more attractive valuation metrics than EFX, so it seems like value investors will conclude that FI is the superior option right now.
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Fiserv, Inc. (FI) : Free Stock Analysis Report
Equifax, Inc. (EFX) : Free Stock Analysis Report
