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 stocks presents investors with the better value opportunity right now? Let's 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, both BB Seguridade Participacoes SA and Moody's are sporting a Zacks Rank of #2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
BBSEY currently has a forward P/E ratio of 8.35, while MCO has a forward P/E of 32.56. We also note that BBSEY has a PEG ratio of 2.58. 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. MCO currently has a PEG ratio of 2.69.
Another notable valuation metric for BBSEY is its P/B ratio of 5.8. 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, MCO has a P/B of 23.12.
These are just a few of the metrics contributing to BBSEY's Value grade of B and MCO's Value grade of F.
Both BBSEY and MCO are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BBSEY is the superior value option right now.
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BB Seguridade Participacoes SA (BBSEY): Free Stock Analysis Report Moody's Corporation (MCO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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