Investors interested in Financial - Miscellaneous Services stocks are likely familiar with Intercorp Financial Services Inc. (IFS) and Blackstone Inc. (BX). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Intercorp Financial Services Inc. is sporting a Zacks Rank of #2 (Buy), while Blackstone Inc. has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that IFS is likely seeing its earnings outlook improve to a greater extent. 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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
IFS currently has a forward P/E ratio of 8.12, while BX has a forward P/E of 28.84. We also note that IFS has a PEG ratio of 0.34. 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. BX currently has a PEG ratio of 1.29.
Another notable valuation metric for IFS is its P/B ratio of 1.34. 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, BX has a P/B of 5.50.
These are just a few of the metrics contributing to IFS's Value grade of A and BX's Value grade of D.
IFS stands above BX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that IFS is the superior value option right now.
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Intercorp Financial Services Inc. (IFS): Free Stock Analysis Report Blackstone Inc. (BX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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