INTR vs. AXP: Which Stock Is the Better Value Option?

Investors interested in Financial - Miscellaneous Services stocks are likely familiar with Inter & Co. Inc. (INTR) and American Express (AXP). 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.

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, Inter & Co. Inc. has a Zacks Rank of #2 (Buy), while American Express has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that INTR likely has seen a stronger improvement to its earnings outlook than AXP has recently. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

INTR currently has a forward P/E ratio of 15.47, while AXP has a forward P/E of 21.40. We also note that INTR has a PEG ratio of 0.42. 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. AXP currently has a PEG ratio of 1.73.

Another notable valuation metric for INTR is its P/B ratio of 2.28. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, AXP has a P/B of 7.04.

These are just a few of the metrics contributing to INTR's Value grade of A and AXP's Value grade of C.

INTR is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that INTR is likely the superior value option right now.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research