Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either Intercorp Financial Services Inc. (IFS) or HA Sustainable Infrastructure Capital (HASI). 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, Intercorp Financial Services Inc. is sporting a Zacks Rank of #2 (Buy), while HA Sustainable Infrastructure Capital has a Zacks Rank of #3 (Hold). This means that IFS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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.
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.
IFS currently has a forward P/E ratio of 8.60, while HASI has a forward P/E of 12.10. We also note that IFS has a PEG ratio of 0.38. 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. HASI currently has a PEG ratio of 1.05.
Another notable valuation metric for IFS is its P/B ratio of 1.54. 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, HASI has a P/B of 1.7.
These are just a few of the metrics contributing to IFS's Value grade of B and HASI's Value grade of D.
IFS 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 IFS is likely the superior value option right now.
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Intercorp Financial Services Inc. (IFS): Free Stock Analysis Report
HA Sustainable Infrastructure Capital, Inc. (HASI): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).