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CATM vs. ENV: Which Stock Is the Better Value Option?

Zacks Equity Research
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Investors interested in stocks from the Financial Transaction Services sector have probably already heard of Cardtronics (CATM) and Envestnet (ENV). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Cardtronics is sporting a Zacks Rank of #2 (Buy), while Envestnet has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CATM likely has seen a stronger improvement to its earnings outlook than ENV has recently. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

CATM currently has a forward P/E ratio of 13.98, while ENV has a forward P/E of 27.88. We also note that CATM has a PEG ratio of 1.16. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ENV currently has a PEG ratio of 1.72.

Another notable valuation metric for CATM is its P/B ratio of 3.15. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ENV has a P/B of 4.96.

Based on these metrics and many more, CATM holds a Value grade of A, while ENV has a Value grade of D.

CATM has seen stronger estimate revision activity and sports more attractive valuation metrics than ENV, so it seems like value investors will conclude that CATM is the superior option right now.


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Cardtronics PLC (CATM) : Free Stock Analysis Report
 
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