Back to top

Image: Bigstock

CIXX or RPRX: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in stocks from the Financial - Miscellaneous Services sector have probably already heard of CI Financial Corp. (CIXX - Free Report) and Royalty Pharma (RPRX - 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.

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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

CI Financial Corp. has a Zacks Rank of #2 (Buy), while Royalty Pharma has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CIXX 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.

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.

CIXX currently has a forward P/E ratio of 6.95, while RPRX has a forward P/E of 17.77. We also note that CIXX has a PEG ratio of 0.87. 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. RPRX currently has a PEG ratio of 1.67.

Another notable valuation metric for CIXX is its P/B ratio of 2.50. 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, RPRX has a P/B of 2.94.

These metrics, and several others, help CIXX earn a Value grade of A, while RPRX has been given a Value grade of D.

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

In-Depth Zacks Research for the Tickers Above

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

CI Financial Corp. (CIXX) - free report >>

Royalty Pharma PLC (RPRX) - free report >>

Published in