Investors with an interest in Financial Transaction Services stocks have likely encountered both Fidelity National Information Services (FIS) and DLocal (DLO). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Fidelity National Information Services is sporting a Zacks Rank of #2 (Buy), while DLocal has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that FIS likely has seen a stronger improvement to its earnings outlook than DLO has recently. But this is just one factor that value investors are interested in.
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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
FIS currently has a forward P/E ratio of 8.78, while DLO has a forward P/E of 31.59. We also note that FIS has a PEG ratio of 0.85. 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. DLO currently has a PEG ratio of 0.99.
Another notable valuation metric for FIS is its P/B ratio of 1.61. 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, DLO has a P/B of 13.62.
Based on these metrics and many more, FIS holds a Value grade of B, while DLO has a Value grade of D.
FIS stands above DLO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FIS is the superior value option right now.
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