Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either BB Seguridade Participacoes SA (BBSEY) or Moody's (MCO). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, BB Seguridade Participacoes SA is sporting a Zacks Rank of #2 (Buy), while Moody's has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BBSEY is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

BBSEY currently has a forward P/E ratio of 8.75, while MCO has a forward P/E of 35.84. We also note that BBSEY has a PEG ratio of 1.33. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. MCO currently has a PEG ratio of 2.87.

Another notable valuation metric for BBSEY is its P/B ratio of 7.49. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, MCO has a P/B of 22.72.

These metrics, and several others, help BBSEY earn a Value grade of B, while MCO has been given a Value grade of F.

BBSEY has seen stronger estimate revision activity and sports more attractive valuation metrics than MCO, so it seems like value investors will conclude that BBSEY is the superior option right now.

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BB Seguridade Participacoes SA (BBSEY):Free Stock Analysis Report

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Moody's Corporation (MCO):Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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