PNC vs. TW: Which Stock Is the Better Value Option?

Investors with an interest in Financial - Investment Bank stocks have likely encountered both The PNC Financial Services Group, Inc (PNC) and Tradeweb Markets (TW). But which of these two stocks presents investors with the better value opportunity right now? 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.

Currently, The PNC Financial Services Group, Inc has a Zacks Rank of #2 (Buy), while Tradeweb Markets has a Zacks Rank of #3 (Hold). This means that PNC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

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.

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.

PNC currently has a forward P/E ratio of 12.12, while TW has a forward P/E of 26.97. We also note that PNC has a PEG ratio of 0.93. 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. TW currently has a PEG ratio of 1.94.

Another notable valuation metric for PNC is its P/B ratio of 1.44. 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, TW has a P/B of 3.53.

These are just a few of the metrics contributing to PNC's Value grade of B and TW's Value grade of D.

PNC stands above TW thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PNC is the superior value option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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