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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.
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 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). 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 just one factor that value investors are interested in.
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 8.12, while BAM has a forward P/E of 35.75. We also note that GBOOY has a PEG ratio of 0.95. 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. BAM currently has a PEG ratio of 2.19.
Another notable valuation metric for GBOOY is its P/B ratio of 1.82. 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 10.76.
Based on these metrics and many more, GBOOY holds a Value grade of A, while BAM has a Value grade of F.
GBOOY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that GBOOY is likely the superior value option right now.
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Grupo Financiero Banorte SAB de CV (GBOOY) : Free Stock Analysis Report