In the Financial Transaction Services sector, WEX (NYSE: NYSE:WEX) and MasterCard (NYSE: MA) are emerging as potentially undervalued assets for investors. The strategic evaluation of these companies is based on the Zacks Rank and Style Scores system, which grades companies on various factors including earnings yield and cash flow per share.
Today, WEX holds a Zacks Rank of #2 (Buy), signaling positive earnings estimate revisions and an expected EPS growth rate with a PEG ratio of 1.10. On the other hand, MasterCard, ranked #3 (Hold) by Zacks, has a PEG ratio of 1.64.
Further key valuation metrics include forward P/E ratios and P/B ratios which compare market value to book value. WEX's forward P/E ratio stands at 11.30 while MasterCard's is significantly higher at 29.96. In terms of the P/B ratio, WEX's figure is 4.14, whereas MasterCard's is notably greater at 53.94.
These factors have led to WEX receiving a Value grade B and MasterCard a D in the strategic evaluation. This grading system reflects the potential of these companies as investment options, with WEX appearing to offer more value at present according to this analysis.
InvestingPro Insights
For those considering investing in the Financial Transaction Services sector, real-time data from InvestingPro provides valuable insights into companies like WEX and MasterCard.
InvestingPro's data reveals that MasterCard (MA) has a P/E ratio of 32.35, which is higher than the industry average. This suggests that the company's stock might be overvalued. However, it's worth noting that MasterCard has consistently increased its earnings per share and maintained dividend payments for 18 consecutive years, as per InvestingPro Tips.
On the other hand, WEX has a lower P/E ratio of 26.21, indicating a potentially undervalued stock. The company has been profitable over the last twelve months and is expected to grow its net income this year. However, WEX does not pay a dividend to shareholders.
In terms of market capitalization, MasterCard is significantly larger with a market cap of 349.27B USD, compared to WEX's 7010M USD.
In conclusion, both companies present potential investment opportunities, but it's important to consider the data and InvestingPro Tips before making a decision. For further insights, InvestingPro offers additional tips and metrics for both companies.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.