Investors with an interest in Financial Transaction Services stocks have likely encountered both Evertec (EVTC) and RB Global (RBA). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Evertec has a Zacks Rank of #2 (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 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
EVTC currently has a forward P/E ratio of 9.68, while RBA has a forward P/E of 28.49. We also note that EVTC has a PEG ratio of 1.38. 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 2.38.
Another notable valuation metric for EVTC is its P/B ratio of 3.51. 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, RBA has a P/B of 3.71.
Based on these metrics and many more, EVTC holds a Value grade of A, while RBA has a Value grade of C.
EVTC stands above RBA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that EVTC is the superior value 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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