EVTC or PAYP: Which Is the Better Value Stock Right Now?
Investors with an interest in Financial Transaction Services stocks have likely encountered both Evertec (EVTC) and Paypay (PAYP). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Evertec is sporting a Zacks Rank of #2 (Buy), while Paypay 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 EVTC has an improving earnings outlook. 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.
EVTC currently has a forward P/E ratio of 7.08, while PAYP has a forward P/E of 22.27. We also note that EVTC has a PEG ratio of 0.71. 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. PAYP currently has a PEG ratio of 0.72.
Another notable valuation metric for EVTC is its P/B ratio of 2.62. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, PAYP has a P/B of 4.22.
These metrics, and several others, help EVTC earn a Value grade of A, while PAYP has been given a Value grade of C.
EVTC stands above PAYP 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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See Stocks Now >>Evertec, Inc. (EVTC) : Free Stock Analysis Report
PayPay Corporation (PAYP) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
