In This Article:
Investors with an interest in Financial - Miscellaneous Services stocks have likely encountered both Euronet Worldwide (EEFT) and Brookfield Asset Management (BAM). But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Euronet Worldwide and Brookfield Asset Management are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that EEFT 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 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.
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.
EEFT currently has a forward P/E ratio of 10.81, while BAM has a forward P/E of 35.24. We also note that EEFT has a PEG ratio of 0.72. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BAM currently has a PEG ratio of 2.19.
Another notable valuation metric for EEFT is its P/B ratio of 3.79. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, BAM has a P/B of 7.79.
These are just a few of the metrics contributing to EEFT's Value grade of A and BAM's Value grade of F.
EEFT stands above BAM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that EEFT is 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
Euronet Worldwide, Inc. (EEFT) : Free Stock Analysis Report