IFS vs. MCO: Which Stock Should Value Investors Buy Now?
Investors interested in Financial - Miscellaneous Services stocks are likely familiar with Intercorp Financial Services Inc. (IFS) and Moody's (MCO). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Intercorp Financial Services Inc. and Moody's are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that IFS has an improving earnings outlook. However, value investors will care about much more than just this.
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.
IFS currently has a forward P/E ratio of 6.46, while MCO has a forward P/E of 33.94. We also note that IFS has a PEG ratio of 0.56. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. MCO currently has a PEG ratio of 3.09.
Another notable valuation metric for IFS is its P/B ratio of 1.24. 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, MCO has a P/B of 23.86.
These metrics, and several others, help IFS earn a Value grade of A, while MCO has been given a Value grade of F.
IFS sticks out from MCO in both our Zacks Rank and Style Scores models, so value investors will likely feel that IFS is the better option right now.
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Intercorp Financial Services Inc. (IFS) : Free Stock Analysis Report
Moody's Corporation (MCO) : Free Stock Analysis Report
