Investors with an interest in Financial - Miscellaneous Services stocks have likely encountered both Bread Financial Holdings (BFH) and Blackstone Inc. (BX). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Bread Financial Holdings and Blackstone Inc. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BFH 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 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
BFH currently has a forward P/E ratio of 7.31, while BX has a forward P/E of 30.33. We also note that BFH has a PEG ratio of 0.55. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BX currently has a PEG ratio of 1.24.
Another notable valuation metric for BFH is its P/B ratio of 0.92. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, BX has a P/B of 5.73.
These are just a few of the metrics contributing to BFH's Value grade of A and BX's Value grade of D.
BFH stands above BX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BFH is the superior value option right now.
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Bread Financial Holdings, Inc. (BFH): Free Stock Analysis Report Blackstone Inc. (BX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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