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25 June
FI or EFX: Which Is the Better Value Stock Right Now?

Investors interested in stocks from the Financial Transaction Services sector have probably already heard of Fiserv (FI) and Equifax (EFX). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Fiserv has a Zacks Rank of #2 (Buy), while Equifax has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that FI has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.

FI currently has a forward P/E ratio of 17.28, while EFX has a forward P/E of 32.63. We also note that FI has a PEG ratio of 1.21. 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. EFX currently has a PEG ratio of 1.67.

Another notable valuation metric for FI is its P/B ratio of 2.99. 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, EFX has a P/B of 6.49.

Based on these metrics and many more, FI holds a Value grade of B, while EFX has a Value grade of C.

FI 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 FI is likely the superior value option right now.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.