uploads/2017/02/FISV-PBV-1.png

Could FIS Be a Great Value Buy in 2017?

By

Updated

Valuations

Fidelity National Information Services (FIS) stock is currently trading extremely lower than its peers. You can judge this by the company’s PBV (price-to-book-value) multiple or its one-year forward PE (price to earnings) multiple.

FIS compared to its peers

FIS trades at a PBV multiple of 2.7x. Its peers Fiserv (FISV) and Jack Henry & Associates (JKHY) trade at significant premiums to FIS. FISV has a PBV multiple of 9.2x, while JKHY trades at a PBV multiple of 7.3x.

Such cheap valuations coupled with FIS’s potential growth after the SunGard acquisition could make it an attractive investment. In 2016, FIS stock outperformed the financial sector as well as the broader market.

The Financial Select Sector SPDR ETF (XLF) represents the financial sector. During 2016, the financial sector rose 22.0%. In comparison, FIS rose 25.0%. Peers (EFX) Fiserv (FISV) and Jack Henry & Associates (JKHY) rose 16.0% and 14.0%, respectively.

More From Market Realist