PAGS or EFX: Which Is the Better Value Stock Right Now?
Investors interested in Financial Transaction Services stocks are likely familiar with PagSeguro Digital Ltd. (PAGS) 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.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, PagSeguro Digital Ltd. is sporting a Zacks Rank of #2 (Buy), while Equifax has a Zacks Rank of #3 (Hold). This means that PAGS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
PAGS currently has a forward P/E ratio of 9.78, while EFX has a forward P/E of 28.26. We also note that PAGS has a PEG ratio of 0.99. 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 1.98.
Another notable valuation metric for PAGS is its P/B ratio of 1.41. 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, EFX has a P/B of 5.78.
Based on these metrics and many more, PAGS holds a Value grade of A, while EFX has a Value grade of C.
PAGS has seen stronger estimate revision activity and sports more attractive valuation metrics than EFX, so it seems like value investors will conclude that PAGS is the superior option right now.
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PagSeguro Digital Ltd. (PAGS) : Free Stock Analysis Report
Equifax, Inc. (EFX) : Free Stock Analysis Report
