Investors interested in stocks from the Financial Transaction Services sector have probably already heard of Cardtronics (CATM - Free Report) and Fiserv (FISV - 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.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Cardtronics has a Zacks Rank of #1 (Strong Buy), while Fiserv has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CATM likely has seen a stronger improvement to its earnings outlook than FISV has recently. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
CATM currently has a forward P/E ratio of 18.62, while FISV has a forward P/E of 25.80. We also note that CATM has a PEG ratio of 1.55. 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. FISV currently has a PEG ratio of 2.24.
Another notable valuation metric for CATM is its P/B ratio of 3.85. 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, FISV has a P/B of 11.48.
These metrics, and several others, help CATM earn a Value grade of A, while FISV has been given a Value grade of D.
CATM sticks out from FISV in both our Zacks Rank and Style Scores models, so value investors will likely feel that CATM is the better option right now.