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AXP vs. EEFT: Which Stock Is the Better Value Option?

Zacks
Does American Assets Trust (AAT) have what it takes to be a top stock pick for momentum investors? Let's find out.

Investors interested in Financial - Miscellaneous Services stocks are likely familiar with American Express (AXP) and Euronet Worldwide (EEFT). 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.

Both American Express and Euronet Worldwide have a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is only part of the picture 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.

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Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

AXP currently has a forward P/E ratio of 14.45, while EEFT has a forward P/E of 20.31. We also note that AXP has a PEG ratio of 1.38. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. EEFT currently has a PEG ratio of 1.52.

Another notable valuation metric for AXP is its P/B ratio of 4.25. 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, EEFT has a P/B of 4.82.

These metrics, and several others, help AXP earn a Value grade of B, while EEFT has been given a Value grade of C.

Both AXP and EEFT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AXP is the superior value option right now.


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American Express Company (AXP) : Free Stock Analysis Report
 
Euronet Worldwide, Inc. (EEFT) : Free Stock Analysis Report
 
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Zacks Investment Research