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FIS or FI: Which Is the Better Value Stock Right Now?

Investors with an interest in Financial Transaction Services stocks have likely encountered both Fidelity National Information Services (FIS) and Fiserv (FI). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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, Fidelity National Information Services has a Zacks Rank of #2 (Buy), while Fiserv has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that FIS is likely seeing its earnings outlook improve to a greater extent. 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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

FIS currently has a forward P/E ratio of 15.47, while FI has a forward P/E of 18.78. We also note that FIS has a PEG ratio of 0.78. 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. FI currently has a PEG ratio of 1.33.

Another notable valuation metric for FIS is its P/B ratio of 2.55. 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, FI has a P/B of 3.28.

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

FIS is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that FIS is likely the superior value option right now.

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Fidelity National Information Services, Inc. (FIS) : Free Stock Analysis Report

Fiserv, Inc. (FI) : Free Stock Analysis Report

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Zacks Investment Research