Equifax vs Moody's Which Is a Better Investment?

Equifax and Moody's are two major players in the financial industry, each providing valuable services to investors and businesses. Equifax specializes in credit reporting and data analytics, while Moody's is a renowned credit rating agency. Both companies have a significant impact on the financial markets, with their stocks being closely watched by investors. In recent years, their stocks have experienced fluctuations due to changing market conditions and regulatory changes. This article will explore the performance of Equifax and Moody's stocks and analyze the factors driving their success or challenges.

Equifax or Moody's?

When comparing Equifax and Moody's, 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 Moody's.

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 0.58%, while Moody's has a dividend yield of 0.69%. 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, Moody's reports a 5-year dividend growth of 11.84% year and a payout ratio of 30.20%.

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 59.69 and Moody's's P/E ratio at 43.40. 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 6.84 while Moody's's P/B ratio is 22.26.

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 Moody's's is 0.39%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Equifax's ROE at 12.03% and Moody's's ROE at 54.97%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $269.62 for Equifax and $476.35 for Moody's. Over the past year, Equifax's prices ranged from $182.01 to $309.63, with a yearly change of 70.12%. Moody's's prices fluctuated between $342.16 and $495.10, with a yearly change of 44.70%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.