Experian vs TransUnion Which Should You Buy?

Experian and TransUnion are two of the leading credit reporting agencies in the world, providing essential financial services such as credit reporting, credit scoring, and fraud prevention. Investors interested in the financial sector often compare the stock performance of these two companies to make informed investment decisions. Experian, based in Ireland, has a strong track record of growth and stability, while TransUnion, headquartered in the United States, has shown resilience and agility in adapting to market trends. Both companies play a critical role in the global financial landscape, making their stocks a compelling investment opportunity for savvy investors.

Experian or TransUnion?

When comparing Experian 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 Experian 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. Experian has a dividend yield of 1.15%, while TransUnion has a dividend yield of 0.39%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Experian reports a 5-year dividend growth of 4.14% year and a payout ratio of 42.56%. 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 Experian P/E ratio at 25.73 and TransUnion's P/E ratio at 92.72. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Experian P/B ratio is 10.00 while TransUnion's P/B ratio is 4.93.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Experian has seen a 5-year revenue growth of 0.42%, while TransUnion's is 0.58%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Experian's ROE at 41.06% and TransUnion's ROE at 5.45%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $50.37 for Experian and $105.11 for TransUnion. Over the past year, Experian's prices ranged from $32.14 to $53.10, with a yearly change of 65.21%. TransUnion's prices fluctuated between $51.50 and $113.17, with a yearly change of 119.75%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.