Investors with an interest in Financial - Consumer Loans stocks have likely encountered both Santander (MC:SAN) Consumer (SC) and First Cash Financial Services (FCFS). 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Santander Consumer has a Zacks Rank of #2 (Buy), while First Cash Financial Services has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SC has an improving earnings outlook. 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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
SC currently has a forward P/E ratio of 9.58, while FCFS has a forward P/E of 25.75. We also note that SC has a PEG ratio of 1.37. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. FCFS currently has a PEG ratio of 1.72.
Another notable valuation metric for SC is its P/B ratio of 1.25. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, FCFS has a P/B of 3.30.
These are just a few of the metrics contributing to SC's Value grade of A and FCFS's Value grade of C.
SC stands above FCFS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SC is the superior value option right now.
Santander Consumer USA Holdings Inc. (SC): Free Stock Analysis Report
First Cash, Inc. (FCFS): Free Stock Analysis Report
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