Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either Virtu Financial (VIRT) or Blackstone Inc. (BX). 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.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Virtu Financial has a Zacks Rank of #1 (Strong Buy), while Blackstone Inc. has a Zacks Rank of #3 (Hold) right now. This means that VIRT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
VIRT currently has a forward P/E ratio of 11.31, while BX has a forward P/E of 43.13. We also note that VIRT has a PEG ratio of 0.48. 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. BX currently has a PEG ratio of 1.61.
Another notable valuation metric for VIRT is its P/B ratio of 3.87. 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, BX has a P/B of 7.37.
These metrics, and several others, help VIRT earn a Value grade of B, while BX has been given a Value grade of F.
VIRT stands above BX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that VIRT is the superior value option right now.
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Virtu Financial, Inc. (VIRT) : Free Stock Analysis Report
Blackstone Inc. (BX) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
