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Wex outperforms Equifax in investment value metrics

EditorNikhilesh Pawar
Published 11/15/2023, 02:06 PM
Updated 11/15/2023, 02:06 PM
© Reuters.

NEW YORK - In the financial transaction services sector, investors are closely monitoring Wex Inc. (NYSE: WEX (NYSE:WEX)) and Equifax Inc . (NYSE: NYSE:EFX), as they evaluate investment opportunities using the Zacks Rank system. Wex, with a Zacks Rank of #2 (Buy), is currently standing out with positive earnings estimate revisions, suggesting a stronger improvement in its earnings outlook compared to Equifax, which holds a rank of #5 (Strong Sell).

Value investors, who look for stocks that appear undervalued based on financial measures, might find Wex more appealing given its current metrics. Wex's forward Price-to-Earnings (P/E) ratio is at 11.95, which is significantly lower than Equifax's 29.27. This metric implies that investors are paying less for each dollar of WEX's earnings than they are for EFX's, signaling a potentially more attractive buy.

Moreover, the Price/Earnings to Growth (PEG) ratio of Wex stands at 1.14, compared to Equifax's 2.82. A lower PEG ratio indicates that the stock may be more undervalued relative to its expected earnings growth, enhancing its appeal to value-oriented investors.

In addition, when considering the Price-to-Book (P/B) ratio, which compares a company's market value to its book value, Wex again leads with a ratio of 4.42 against Equifax's higher ratio of 5.62.

These favorable comparisons contribute to Wex receiving a Zacks' Value grade of B, while Equifax lags behind with an F grade in the same category.

The combination of improving earnings outlook and superior value metrics — including forward P/E ratio, PEG ratio, P/B ratio, earnings yield, cash flow per share, and positive earnings estimate revisions — positions Wex as the more attractive investment option at present among financial transaction service providers.

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