CPAY vs. MA: Which Stock Is the Better Value Option?
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Investors with an interest in Financial Transaction Services stocks have likely encountered both Corpay (CPAY) and MasterCard (MA). 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.
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.
Right now, both Corpay and MasterCard are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is only part of the picture for value investors.
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.
CPAY currently has a forward P/E ratio of 18.68, while MA has a forward P/E of 35.85. We also note that CPAY has a PEG ratio of 1.33. 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. MA currently has a PEG ratio of 2.27.
Another notable valuation metric for CPAY is its P/B ratio of 8.97. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, MA has a P/B of 63.62.
These metrics, and several others, help CPAY earn a Value grade of B, while MA has been given a Value grade of D.
Both CPAY and MA are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CPAY is the superior value option right now.
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Corpay, Inc. (CPAY) : Free Stock Analysis Report
Mastercard Incorporated (MA) : Free Stock Analysis Report