When it comes to the payments industry, (NYSE: MA) and its larger rival Visa (NYSE: V) are two of investors' favorite stocks, and for good reason. The two companies have an essential duopoly on the payment processing industry, and both are extremely profitable businesses. In fact, Mastercard has produced a 46% net profit margin over the past four quarters.

However, if you're a value investor like I am, Visa and Mastercard might look a little too expensive. Even considering its dominance, and the fact that its earnings are steadily growing at a double-digit percentage each year, these aren't cheap stocks. Visa and Mastercard trade for 25 and 31 times forward earnings estimates, respectively, as of this writing.

Like Mastercard and Visa, PayPal (NASDAQ: PYPL) is a highly profitable business in the payments space. But unlike those two, it trades for a rock-bottom valuation. As of this writing, PayPal trades for about 15 times forward earnings estimates, despite producing 17% year-over-year earnings growth in the latest quarter, expanding operating margins, and generally solid growth throughout the business.

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Source Fool.com