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ALLY vs. CACC: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Financial - Consumer Loans sector have probably already heard of Ally Financial (ALLY - Free Report) and Credit Acceptance (CACC - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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, Ally Financial is sporting a Zacks Rank of #1 (Strong Buy), while Credit Acceptance has a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ALLY has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
ALLY currently has a forward P/E ratio of 8.79, while CACC has a forward P/E of 15.84. We also note that ALLY has a PEG ratio of 0.69. 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. CACC currently has a PEG ratio of 0.80.
Another notable valuation metric for ALLY is its P/B ratio of 0.87. 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, CACC has a P/B of 4.66.
Based on these metrics and many more, ALLY holds a Value grade of A, while CACC has a Value grade of C.
ALLY sticks out from CACC in both our Zacks Rank and Style Scores models, so value investors will likely feel that ALLY is the better option right now.
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ALLY vs. CACC: Which Stock Is the Better Value Option?
Investors interested in stocks from the Financial - Consumer Loans sector have probably already heard of Ally Financial (ALLY - Free Report) and Credit Acceptance (CACC - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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, Ally Financial is sporting a Zacks Rank of #1 (Strong Buy), while Credit Acceptance has a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ALLY has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
ALLY currently has a forward P/E ratio of 8.79, while CACC has a forward P/E of 15.84. We also note that ALLY has a PEG ratio of 0.69. 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. CACC currently has a PEG ratio of 0.80.
Another notable valuation metric for ALLY is its P/B ratio of 0.87. 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, CACC has a P/B of 4.66.
Based on these metrics and many more, ALLY holds a Value grade of A, while CACC has a Value grade of C.
ALLY sticks out from CACC in both our Zacks Rank and Style Scores models, so value investors will likely feel that ALLY is the better option right now.