雅虎香港財經 WU vs. V: Which Stock Is the Better Value Option?
Investors interested in Financial Transaction Services stocks are likely familiar with Western Union (WU) and Visa (V). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Western Union and Visa are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that WU is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
WU currently has a forward P/E ratio of 7.36, while V has a forward P/E of 27.77. We also note that WU has a PEG ratio of 1.88. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. V currently has a PEG ratio of 1.89.
Another notable valuation metric for WU is its P/B ratio of 11.01. 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, V has a P/B of 12.98.
These metrics, and several others, help WU earn a Value grade of A, while V has been given a Value grade of C.
WU 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 WU is likely the superior value option right now.
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The Western Union Company (WU) : Free Stock Analysis Report
Visa Inc. (V) : Free Stock Analysis Report
