Back to top

Image: Bigstock

ATCO vs. SEIC: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors with an interest in Financial - Investment Management stocks have likely encountered both Atlas and SEI Investments (SEIC - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.

Currently, Atlas has a Zacks Rank of #2 (Buy), while SEI Investments has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ATCO is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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.

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.

ATCO currently has a forward P/E ratio of 10.70, while SEIC has a forward P/E of 16.62. We also note that ATCO has a PEG ratio of 0.74. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SEIC currently has a PEG ratio of 1.38.

Another notable valuation metric for ATCO is its P/B ratio of 0.95. 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, SEIC has a P/B of 4.80.

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

ATCO stands above SEIC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ATCO is the superior value option right now.


See More Zacks Research for These Tickers


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


SEI Investments Company (SEIC) - free report >>

Published in