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IX vs. BX: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either Orix (IX - Free Report) or Blackstone Inc. (BX - Free Report) . 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, Orix is sporting a Zacks Rank of #2 (Buy), while Blackstone Inc. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that IX likely has seen a stronger improvement to its earnings outlook than BX has recently. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

IX currently has a forward P/E ratio of 8.32, while BX has a forward P/E of 21.30. We also note that IX has a PEG ratio of 0.33. 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. BX currently has a PEG ratio of 0.89.

Another notable valuation metric for IX is its P/B ratio of 0.78. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, BX has a P/B of 3.68.

These metrics, and several others, help IX earn a Value grade of A, while BX has been given a Value grade of C.

IX stands above BX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that IX is the superior value option right now.


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