Investors interested in Financial - Investment Bank stocks are likely familiar with The PNC Financial Services Group, Inc (PNC) and JPMorgan Chase & Co. (JPM). 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
The PNC Financial Services Group, Inc has a Zacks Rank of #2 (Buy), while JPMorgan Chase & Co. has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PNC has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
PNC currently has a forward P/E ratio of 12.10, while JPM has a forward P/E of 15.90. We also note that PNC has a PEG ratio of 1.08. 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. JPM currently has a PEG ratio of 1.65.
Another notable valuation metric for PNC is its P/B ratio of 1.43. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, JPM has a P/B of 2.67.
These are just a few of the metrics contributing to PNC's Value grade of B and JPM's Value grade of F.
PNC sticks out from JPM in both our Zacks Rank and Style Scores models, so value investors will likely feel that PNC is the better option right now.
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The PNC Financial Services Group, Inc (PNC): Free Stock Analysis Report JPMorgan Chase & Co. (JPM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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