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Mastercard Incorporated (MA) - free report >>
Fidelity National Information Services, Inc. (FIS) - free report >>
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Mastercard Incorporated (MA) - free report >>
Fidelity National Information Services, Inc. (FIS) - free report >>
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FIS vs. MA: Which Stock Is the Better Value Option?
Investors with an interest in Financial Transaction Services stocks have likely encountered both Fidelity National Information Services (FIS - Free Report) and MasterCard (MA - 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.
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.
Fidelity National Information Services and MasterCard are both sporting a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.
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 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.
FIS currently has a forward P/E ratio of 14.24, while MA has a forward P/E of 30.22. We also note that FIS has a PEG ratio of 1.02. 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. MA currently has a PEG ratio of 1.88.
Another notable valuation metric for FIS is its P/B ratio of 1.88. 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, MA has a P/B of 63.27.
These are just a few of the metrics contributing to FIS's Value grade of B and MA's Value grade of C.
Both FIS and MA are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that FIS is the superior value option right now.