Equifax vs TransUnion Which Is a Better Investment?

Equifax and TransUnion are two major players in the credit reporting industry, providing valuable information to financial institutions, businesses, and consumers. Both companies operate in a highly regulated environment and face similar challenges and opportunities in the market. Investors often compare Equifax and TransUnion stocks to assess their financial performance and growth prospects. Understanding the differences between these two companies can help investors make informed decisions about their investment portfolio.

Equifax or TransUnion?

When comparing Equifax and TransUnion, 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 TransUnion.

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 0.6%, while TransUnion has a dividend yield of 0.43%. 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, TransUnion reports a 5-year dividend growth of 13.30% year and a payout ratio of 36.64%.

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 57.39 and TransUnion's P/E ratio at 84.23. 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 6.58 while TransUnion's P/B ratio is 4.48.

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 TransUnion's is 0.58%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Equifax's ROE at 12.03% and TransUnion's ROE at 5.45%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $259.70 for Equifax and $96.83 for TransUnion. Over the past year, Equifax's prices ranged from $213.02 to $309.63, with a yearly change of 45.35%. TransUnion's prices fluctuated between $62.42 and $113.17, with a yearly change of 81.29%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.