Investors interested in Financial - Miscellaneous Services stocks are likely familiar with Euronet Worldwide (EEFT) and Brookfield Asset Management (BAM). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Euronet Worldwide has a Zacks Rank of #2 (Buy), while Brookfield Asset Management has a Zacks Rank of #4 (Sell). This means that EEFT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 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.
EEFT currently has a forward P/E ratio of 10.54, while BAM has a forward P/E of 39.13. We also note that EEFT has a PEG ratio of 0.70. 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. BAM currently has a PEG ratio of 2.38.
Another notable valuation metric for EEFT is its P/B ratio of 3.45. 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, BAM has a P/B of 11.54.
These metrics, and several others, help EEFT earn a Value grade of A, while BAM has been given a Value grade of F.
EEFT has seen stronger estimate revision activity and sports more attractive valuation metrics than BAM, so it seems like value investors will conclude that EEFT is the superior option right now.
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Euronet Worldwide, Inc. (EEFT): Free Stock Analysis Report Brookfield Asset Management Ltd. (BAM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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