Investors interested in Financial Transaction Services stocks are likely familiar with Fidelity National Information Services (FIS) and Payoneer Global Inc. (PAYO). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Fidelity National Information Services and Payoneer Global Inc. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that FIS likely has seen a stronger improvement to its earnings outlook than PAYO has recently. But this is just one piece of the puzzle for value investors.
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.
FIS currently has a forward P/E ratio of 13.73, while PAYO has a forward P/E of 24.75. We also note that FIS has a PEG ratio of 1.39. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PAYO currently has a PEG ratio of 7.96.
Another notable valuation metric for FIS is its P/B ratio of 2.70. 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, PAYO has a P/B of 3.49.
These metrics, and several others, help FIS earn a Value grade of B, while PAYO has been given a Value grade of C.
FIS has seen stronger estimate revision activity and sports more attractive valuation metrics than PAYO, so it seems like value investors will conclude that FIS is the superior option right now.
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Fidelity National Information Services, Inc. (FIS): Free Stock Analysis Report Payoneer Global Inc. (PAYO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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