GBOOY vs. BAM: Which Stock Should Value Investors Buy Now?

Investors interested in stocks from the Financial - Miscellaneous Services sector have probably already heard of Grupo Financiero Banorte SAB de CV (GBOOY) and Brookfield Asset Management (BAM). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 Brookfield Asset Management are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GBOOY has an improving earnings outlook. But this is just one piece of the puzzle 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.

GBOOY currently has a forward P/E ratio of 8.11, while BAM has a forward P/E of 32.65. We also note that GBOOY has a PEG ratio of 0.95. 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. BAM currently has a PEG ratio of 1.96.

Another notable valuation metric for GBOOY is its P/B ratio of 1.84. 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, BAM has a P/B of 9.86.

Based on these metrics and many more, GBOOY holds a Value grade of A, while BAM has a Value grade of F.

GBOOY stands above BAM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GBOOY 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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