Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either Grupo Financiero Banorte SAB de CV (GBOOY) or American Express (AXP). 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.
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 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.
Currently, Grupo Financiero Banorte SAB de CV has a Zacks Rank of #2 (Buy), while American Express has a Zacks Rank of #3 (Hold). This means that GBOOY'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.
GBOOY currently has a forward P/E ratio of 8.80, while AXP has a forward P/E of 20.25. We also note that GBOOY has a PEG ratio of 1.09. 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. AXP currently has a PEG ratio of 1.50.
Another notable valuation metric for GBOOY is its P/B ratio of 2.31. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, AXP has a P/B of 7.3.
These metrics, and several others, help GBOOY earn a Value grade of A, while AXP has been given a Value grade of C.
GBOOY has seen stronger estimate revision activity and sports more attractive valuation metrics than AXP, 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 American Express Company (AXP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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