PAGS vs. RBA: Which Stock Should Value Investors Buy Now?
Investors interested in Financial Transaction Services stocks are likely familiar with PagSeguro Digital Ltd. (PAGS) and RB Global (RBA). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, PagSeguro Digital Ltd. has a Zacks Rank of #2 (Buy), while RB Global has a Zacks Rank of #3 (Hold). This means that PAGS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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.
PAGS currently has a forward P/E ratio of 9.39, while RBA has a forward P/E of 24.44. We also note that PAGS has a PEG ratio of 0.57. 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. RBA currently has a PEG ratio of 3.41.
Another notable valuation metric for PAGS is its P/B ratio of 1.61. 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, RBA has a P/B of 2.91.
Based on these metrics and many more, PAGS holds a Value grade of A, while RBA has a Value grade of C.
PAGS 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 PAGS is likely the superior value option right now.
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PagSeguro Digital Ltd. (PAGS) : Free Stock Analysis Report
RB Global, Inc. (RBA) : Free Stock Analysis Report