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NOAH vs. TROW: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Financial - Investment Management sector have probably already heard of Noah Holdings (NOAH - Free Report) and T. Rowe Price (TROW - Free Report) . 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.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Noah Holdings has a Zacks Rank of #1 (Strong Buy), while T. Rowe Price has a Zacks Rank of #5 (Strong Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that NOAH is likely seeing its earnings outlook improve to a greater extent. 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.

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.

NOAH currently has a forward P/E ratio of 5.53, while TROW has a forward P/E of 11.31. We also note that NOAH has a PEG ratio of 0.54. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TROW currently has a PEG ratio of 1.91.

Another notable valuation metric for NOAH is its P/B ratio of 0.82. 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, TROW has a P/B of 2.77.

Based on these metrics and many more, NOAH holds a Value grade of A, while TROW has a Value grade of C.

NOAH sticks out from TROW in both our Zacks Rank and Style Scores models, so value investors will likely feel that NOAH is the better option right now.


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T. Rowe Price Group, Inc. (TROW) - free report >>

Noah Holdings Ltd. (NOAH) - free report >>

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