FIS vs. EFX: Which Stock Is the Better Value Option?
Investors looking for stocks in the Financial Transaction Services sector might want to consider either Fidelity National Information Services (FIS) or Equifax (EFX). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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.
Currently, Fidelity National Information Services has a Zacks Rank of #2 (Buy), while Equifax has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that FIS is likely seeing its earnings outlook improve to a greater extent. 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.
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.
FIS currently has a forward P/E ratio of 14.93, while EFX has a forward P/E of 33.75. We also note that FIS has a PEG ratio of 0.88. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. EFX currently has a PEG ratio of 2.
Another notable valuation metric for FIS is its P/B ratio of 2.14. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, EFX has a P/B of 6.85.
These are just a few of the metrics contributing to FIS's Value grade of B and EFX's Value grade of C.
FIS sticks out from EFX in both our Zacks Rank and Style Scores models, so value investors will likely feel that FIS is the better option right now.
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Fidelity National Information Services, Inc. (FIS) : Free Stock Analysis Report
Equifax, Inc. (EFX) : Free Stock Analysis Report
