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IFS or MCO: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either Intercorp Financial Services Inc. (IFS - Free Report) or Moody's (MCO - Free Report) . 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Intercorp Financial Services Inc. and Moody's are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that IFS likely has seen a stronger improvement to its earnings outlook than MCO has recently. 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.

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.

IFS currently has a forward P/E ratio of 7.03, while MCO has a forward P/E of 33.24. We also note that IFS has a PEG ratio of 0.57. 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. MCO currently has a PEG ratio of 3.02.

Another notable valuation metric for IFS is its P/B ratio of 1.15. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, MCO has a P/B of 21.

These are just a few of the metrics contributing to IFS's Value grade of A and MCO's Value grade of F.

IFS stands above MCO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that IFS is the superior value option right now.


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