Yahoo Finance 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 companies is the best option for those looking for undervalued stocks? 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 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 #1 (Strong 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. But this is just one factor that value investors are interested in.
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 7.01, while V has a forward P/E of 27.70. We also note that WU has a PEG ratio of 1.79. 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. V currently has a PEG ratio of 1.88.
Another notable valuation metric for WU is its P/B ratio of 10.49. 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, V has a P/B of 12.95.
These are just a few of the metrics contributing to WU's Value grade of A and V's 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
