Investors looking for stocks in the Financial - Investment Bank sector might want to consider either BGC Group (BGC) or Tradeweb Markets (TW). But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, BGC Group has a Zacks Rank of #1 (Strong Buy), while Tradeweb Markets has a Zacks Rank of #3 (Hold). This means that BGC'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 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.
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.
BGC currently has a forward P/E ratio of 6.96, while TW has a forward P/E of 39.45. We also note that BGC has a PEG ratio of 0.28. 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. TW currently has a PEG ratio of 2.21.
Another notable valuation metric for BGC is its P/B ratio of 3.79. 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 4.96.
These are just a few of the metrics contributing to BGC's Value grade of B and TW's Value grade of F.
BGC stands above TW thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BGC is the superior value option right now.
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BGC Group, Inc. (BGC): Free Stock Analysis Report Tradeweb Markets Inc. (TW): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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