Equifax vs Experian Which Is a Smarter Choice?

Equifax and Experian are two of the leading credit reporting agencies in the world, providing crucial information to lenders, businesses, and consumers. Both companies play a vital role in the financial industry, helping individuals and organizations make informed decisions. In recent years, their stocks have been closely monitored by investors due to their strong market presence and potential for growth. This comparison aims to analyze the performance and prospects of Equifax vs Experian stocks, highlighting key factors influencing their value in the market.

Equifax or Experian?

When comparing Equifax and Experian, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Equifax and Experian.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Equifax has a dividend yield of 0.59%, while Experian has a dividend yield of 1.29%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Equifax reports a 5-year dividend growth of 0.00% year and a payout ratio of 34.29%. On the other hand, Experian reports a 5-year dividend growth of 4.14% year and a payout ratio of 37.84%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Equifax P/E ratio at 58.55 and Experian's P/E ratio at 23.07. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Equifax P/B ratio is 6.71 while Experian's P/B ratio is 8.97.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Equifax has seen a 5-year revenue growth of 0.51%, while Experian's is 0.42%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Equifax's ROE at 12.03% and Experian's ROE at 41.06%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $261.50 for Equifax and $45.35 for Experian. Over the past year, Equifax's prices ranged from $213.02 to $309.63, with a yearly change of 45.35%. Experian's prices fluctuated between $38.06 and $53.10, with a yearly change of 39.52%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.