Investors interested in Financial - Miscellaneous Services stocks are likely familiar with Orix (IX) and Euronet Worldwide (EEFT). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Both Orix and Euronet Worldwide have a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
IX currently has a forward P/E ratio of 6.31, while EEFT has a forward P/E of 18.81. We also note that IX has a PEG ratio of 0.88. 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. EEFT currently has a PEG ratio of 1.41.
Another notable valuation metric for IX is its P/B ratio of 0.76. 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, EEFT has a P/B of 5.60.
Based on these metrics and many more, IX holds a Value grade of A, while EEFT has a Value grade of C.
Both IX and EEFT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that IX is the superior value option right now.
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