INTR or AXP: Which Is the Better Value Stock Right Now?
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 is more attractive to value investors? We'll need to take a closer look to find out.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Inter & Co. Inc. has a Zacks Rank of #2 (Buy), while American Express has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that INTR likely has seen a stronger improvement to its earnings outlook than AXP 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
INTR currently has a forward P/E ratio of 16.24, while AXP has a forward P/E of 21.54. We also note that INTR has a PEG ratio of 0.44. 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 1.74.
Another notable valuation metric for INTR is its P/B ratio of 2.4. 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, AXP has a P/B of 7.08.
These are just a few of the metrics contributing to INTR's Value grade of A and AXP's Value grade of C.
INTR sticks out from AXP in both our Zacks Rank and Style Scores models, so value investors will likely feel that INTR is the better option right now.
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This article originally published on Zacks Investment Research (zacks.com).
