PAGS or FI: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Financial Transaction Services sector might want to consider either PagSeguro Digital Ltd. (PAGS) or Fiserv (FI). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
PagSeguro Digital Ltd. has a Zacks Rank of #2 (Buy), while Fiserv has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that PAGS likely has seen a stronger improvement to its earnings outlook than FI has recently. But this is just one piece of the puzzle for value investors.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
PAGS currently has a forward P/E ratio of 10.20, while FI has a forward P/E of 17.48. We also note that PAGS has a PEG ratio of 1.04. 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. FI currently has a PEG ratio of 1.41.
Another notable valuation metric for PAGS is its P/B ratio of 1.43. 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, FI has a P/B of 2.58.
These are just a few of the metrics contributing to PAGS's Value grade of A and FI's Value grade of C.
PAGS has seen stronger estimate revision activity and sports more attractive valuation metrics than FI, 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
Fiserv, Inc. (FI) : Free Stock Analysis Report
