FIS or MA: Which Is the Better Value Stock Right Now?
Investors interested in Financial Transaction Services stocks are likely familiar with Fidelity National Information Services (FIS) and MasterCard (MA). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Fidelity National Information Services has a Zacks Rank of #2 (Buy), while MasterCard has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that FIS is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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 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.
FIS currently has a forward P/E ratio of 16.61, while MA has a forward P/E of 34.49. We also note that FIS has a PEG ratio of 0.83. 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. MA currently has a PEG ratio of 1.94.
Another notable valuation metric for FIS is its P/B ratio of 2.76. 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, MA has a P/B of 61.05.
These metrics, and several others, help FIS earn a Value grade of B, while MA has been given a Value grade of D.
FIS is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that FIS is likely the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Fidelity National Information Services, Inc. (FIS) : Free Stock Analysis Report
Mastercard Incorporated (MA) : Free Stock Analysis Report