Investors with an interest in Financial - Investment Management stocks have likely encountered both Janus Henderson Group plc (JHG) and Carlyle Group (CG). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Janus Henderson Group plc has a Zacks Rank of #1 (Strong Buy), while Carlyle Group has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that JHG is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
JHG currently has a forward P/E ratio of 11.73, while CG has a forward P/E of 14.97. We also note that JHG has a PEG ratio of 1.02. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CG currently has a PEG ratio of 1.18.
Another notable valuation metric for JHG is its P/B ratio of 1.35. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, CG has a P/B of 3.31.
These are just a few of the metrics contributing to JHG's Value grade of B and CG's Value grade of C.
JHG sticks out from CG in both our Zacks Rank and Style Scores models, so value investors will likely feel that JHG is the better option right now.
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Janus Henderson Group plc (JHG): Free Stock Analysis Report Carlyle Group Inc. (CG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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