Investors interested in Financial - Miscellaneous Services stocks are likely familiar with 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.
Right now, Grupo Financiero Banorte SAB de CV is sporting a Zacks Rank of #2 (Buy), while Brookfield Asset Management has a Zacks Rank of #3 (Hold). 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 only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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 8.56, while BAM has a forward P/E of 34.55. We also note that GBOOY has a PEG ratio of 1.00. 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 2.07.
Another notable valuation metric for GBOOY is its P/B ratio of 1.94. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, BAM has a P/B of 10.38.
These metrics, and several others, help GBOOY earn a Value grade of A, while BAM has been given a Value grade of F.
GBOOY has seen stronger estimate revision activity and sports more attractive valuation metrics than BAM, 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 Brookfield Asset Management Ltd. (BAM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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