EVTC vs. MA: Which Stock Is the Better Value Option?
Investors looking for stocks in the Financial Transaction Services sector might want to consider either EvertecEVTC-- (EVTC) or MasterCardMA-- (MA). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Evertec has a Zacks Rank of #2 (Buy), while MasterCard has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that EVTCEVTC-- has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
EVTC currently has a forward P/E ratio of 7.22, while MAMA-- has a forward P/E of 25.47. We also note that EVTC has a PEG ratio of 0.93. 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. MA currently has a PEG ratio of 1.59.
Another notable valuation metric for EVTC is its P/B ratio of 2.85. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, MA has a P/B of 57.28.
These are just a few of the metrics contributing to EVTC's Value grade of A and MA's Value grade of D.
EVTC sticks out from MA in both our Zacks Rank and Style Scores models, so value investors will likely feel that EVTC is the better option right now.
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Evertec, Inc. (EVTC): Free Stock Analysis Report
Mastercard Incorporated (MA): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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