Investors with an interest in Financial Transaction Services stocks have likely encountered both PagSeguro Digital Ltd. (PAGS) 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 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.
Currently, PagSeguro Digital Ltd. has a Zacks Rank of #1 (Strong Buy), while RB Global has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PAGS has an improving earnings outlook. 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.
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.
PAGS currently has a forward P/E ratio of 6.40, while RBA has a forward P/E of 27.45. We also note that PAGS has a PEG ratio of 0.45. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. RBA currently has a PEG ratio of 2.29.
Another notable valuation metric for PAGS is its P/B ratio of 1.13. 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, RBA has a P/B of 3.57.
Based on these metrics and many more, PAGS holds a Value grade of B, while RBA has a Value grade of C.
PAGS stands above RBA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PAGS is the superior value option right now.
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PagSeguro Digital Ltd. (PAGS): 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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