Yahoo Finance GPN or MA: Which Is the Better Value Stock Right Now?
Investors with an interest in Financial Transaction Services stocks have likely encountered both Global Payments (GPN) and MasterCard (MA). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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, Global Payments has a Zacks Rank of #2 (Buy), while MasterCard has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GPN has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
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.
GPN currently has a forward P/E ratio of 8.22, while MA has a forward P/E of 31.96. We also note that GPN has a PEG ratio of 0.58. 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 1.78.
Another notable valuation metric for GPN is its P/B ratio of 1.07. 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, MA has a P/B of 58.14.
These are just a few of the metrics contributing to GPN's Value grade of A and MA's Value grade of D.
GPN sticks out from MA in both our Zacks Rank and Style Scores models, so value investors will likely feel that GPN is the better option right now.
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Global Payments Inc. (GPN) : Free Stock Analysis Report
Mastercard Incorporated (MA) : Free Stock Analysis Report
