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CIT or OCSL: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either CIT Group or Oaktree Specialty Lending (OCSL - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

CIT Group and Oaktree Specialty Lending are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that CIT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

CIT currently has a forward P/E ratio of 8.86, while OCSL has a forward P/E of 10.18. We also note that CIT has a PEG ratio of 0.89. 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. OCSL currently has a PEG ratio of 5.09.

Another notable valuation metric for CIT is its P/B ratio of 0.75. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, OCSL has a P/B of 0.78.

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

CIT has seen stronger estimate revision activity and sports more attractive valuation metrics than OCSL, so it seems like value investors will conclude that CIT is the superior option right now.


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