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

Zacks
11 Mar

Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either Euronet Worldwide (EEFT) or Brookfield Asset Management (BAM). 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.

Currently, Euronet Worldwide has a Zacks Rank of #2 (Buy), while Brookfield Asset Management 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 EEFT 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.

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.

EEFT currently has a forward P/E ratio of 10.56, while BAM has a forward P/E of 27.79. We also note that EEFT has a PEG ratio of 0.70. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BAM currently has a PEG ratio of 1.55.

Another notable valuation metric for EEFT is its P/B ratio of 3.70. 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, BAM has a P/B of 6.06.

These metrics, and several others, help EEFT earn a Value grade of A, while BAM has been given a Value grade of D.

EEFT 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 EEFT is likely the superior value option right now.

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Euronet Worldwide, Inc. (EEFT) : Free Stock Analysis Report

Brookfield Asset Management Ltd. (BAM) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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