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

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Investors looking for stocks in the Financial Transaction Services sector might want to consider either PagSeguro Digital Ltd. (PAGS - Free Report) or Equifax (EFX - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

PagSeguro Digital Ltd. has a Zacks Rank of #1 (Strong 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 PAGS has an improving earnings outlook. But this is only part of the picture 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.

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.

PAGS currently has a forward P/E ratio of 10.50, while EFX has a forward P/E of 34.11. We also note that PAGS has a PEG ratio of 0.74. 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 2.02.

Another notable valuation metric for PAGS is its P/B ratio of 1.67. 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 6.93.

These metrics, and several others, help PAGS earn a Value grade of A, while EFX has been given a Value grade of C.

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


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