Investors interested in Financial Transaction Services stocks are likely familiar with Evertec (EVTC) and RB Global (RBA). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
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 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 #1 (Strong Buy), while RB Global has a Zacks Rank of #4 (Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that EVTC is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
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.
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.
EVTC currently has a forward P/E ratio of 10.05, while RBA has a forward P/E of 28.98. We also note that EVTC has a PEG ratio of 1.43. 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. RBA currently has a PEG ratio of 2.41.
Another notable valuation metric for EVTC is its P/B ratio of 3.64. 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, RBA has a P/B of 3.81.
These metrics, and several others, help EVTC earn a Value grade of B, while RBA has been given a Value grade of D.
EVTC sticks out from RBA 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 RB Global, Inc. (RBA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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