Moody's vs Equifax Which Is More Attractive?

Moody's Corporation and Equifax Inc. are two leading companies in the financial services industry. Moody's primarily focuses on credit ratings, research, and risk analysis, while Equifax is a global provider of information solutions and data analytics. Both companies play crucial roles in the financial markets, but their stocks have shown distinct performance trends in recent years. This comparison will delve into the key factors shaping the stock prices of Moody's and Equifax, highlighting their strengths, weaknesses, and investment opportunities.

Moody's or Equifax?

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

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. Moody's has a dividend yield of 0.7%, while Equifax has a dividend yield of 0.59%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Moody's reports a 5-year dividend growth of 11.84% year and a payout ratio of 30.20%. On the other hand, Equifax reports a 5-year dividend growth of 0.00% year and a payout ratio of 34.29%.

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 Moody's P/E ratio at 44.36 and Equifax's P/E ratio at 58.55. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Moody's P/B ratio is 22.75 while Equifax's P/B ratio is 6.71.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Moody's has seen a 5-year revenue growth of 0.39%, while Equifax's is 0.51%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Moody's's ROE at 54.97% and Equifax's ROE at 12.03%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $486.82 for Moody's and $261.50 for Equifax. Over the past year, Moody's's prices ranged from $360.05 to $503.95, with a yearly change of 39.97%. Equifax's prices fluctuated between $213.02 and $309.63, with a yearly change of 45.35%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.