Back to top

Image: Bigstock

PFG vs. BSIG: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors interested in stocks from the Financial - Investment Management sector have probably already heard of Principal Financial (PFG - Free Report) and BrightSphere Investment Group (BSIG - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, both Principal Financial and BrightSphere Investment Group are sporting a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.

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.

PFG currently has a forward P/E ratio of 7.47, while BSIG has a forward P/E of 9.30. We also note that PFG has a PEG ratio of 1.02. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BSIG currently has a PEG ratio of 3.02.

Another notable valuation metric for PFG is its P/B ratio of 0.74. 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, BSIG has a P/B of 5.36.

These are just a few of the metrics contributing to PFG's Value grade of A and BSIG's Value grade of C.

Both PFG and BSIG are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PFG is the superior value option right now.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Principal Financial Group, Inc. (PFG) - free report >>

BrightSphere Investment Group Inc. (BSIG) - free report >>

Published in