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WEX vs. EFX: Which Stock Is the Better Value Option?

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Investors with an interest in Financial Transaction Services stocks have likely encountered both Wex (WEX - Free Report) and Equifax (EFX - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Wex has a Zacks Rank of #2 (Buy), while Equifax has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that WEX has an improving earnings outlook. But this is just one piece of the puzzle 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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

WEX currently has a forward P/E ratio of 14.99, while EFX has a forward P/E of 26.83. We also note that WEX has a PEG ratio of 0.86. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. EFX currently has a PEG ratio of 1.77.

Another notable valuation metric for WEX is its P/B ratio of 4.25. 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 7.94.

These are just a few of the metrics contributing to WEX's Value grade of B and EFX's Value grade of C.

WEX has seen stronger estimate revision activity and sports more attractive valuation metrics than EFX, so it seems like value investors will conclude that WEX is the superior option right now.


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