Investors interested in Financial - Miscellaneous Services stocks are likely familiar with Grupo Financiero Banorte SAB de CV (GBOOY) and SoFi Technologies, Inc. (SOFI). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Grupo Financiero Banorte SAB de CV and SoFi Technologies, 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 GBOOY 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 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.
GBOOY currently has a forward P/E ratio of 8.36, while SOFI has a forward P/E of 43.01. We also note that GBOOY has a PEG ratio of 1.49. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SOFI currently has a PEG ratio of 1.60.
Another notable valuation metric for GBOOY is its P/B ratio of 2.09. 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, SOFI has a P/B of 3.5.
These metrics, and several others, help GBOOY earn a Value grade of A, while SOFI has been given a Value grade of F.
GBOOY has seen stronger estimate revision activity and sports more attractive valuation metrics than SOFI, so it seems like value investors will conclude that GBOOY is the superior option right now.
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Grupo Financiero Banorte SAB de CV (GBOOY): Free Stock Analysis Report SoFi Technologies, Inc. (SOFI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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