Which stock currently offers the better value?

Investors interested in financial transaction services stocks have likely come across both Global Payments (GPN) and MasterCard (MA). But which of these two companies is the best option for those looking for undervalued stocks? Let’s take a closer look.

The best way to find great value stocks is to combine a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank highlights companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Global Payments has a Zacks Rank of #2 (Buy), while MasterCard has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive earnings estimate revisions, so investors can be confident that GPN has an improved earnings outlook. But that’s just one of the factors of interest to value investors.

Value investors analyze a variety of traditional and proven metrics to find companies that they believe are undervalued at their current share price levels.

The Style Score Value assessment incorporates a number of important fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and numerous other key statistics commonly used by value investors.

GPN currently has a forward P/E ratio of 8.32, while MA has a forward P/E ratio of 30.61. We also note that GPN has a PEG ratio of 0.59. 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. MA currently has a PEG ratio of 1.72.

Another important valuation metric for GPN is its P/B ratio of 1.08. The P/B ratio is used to compare the market value of a stock to its book value, which is defined as total assets minus total liabilities. For comparison, MA has a P/B ratio of 55.68.

These and several other metrics help GPN to achieve a grade of A, while MA receives a grade of D.

The story goes on

GPN has seen stronger estimate revision activity and the company has more attractive valuation multiples than MA. Therefore, value investors seem to conclude that GPN is the better option at present.

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Global Payments Inc. (GPN): Free Stock Analysis Report

Mastercard Incorporated (MA): Free Stock Analysis Report

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