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NOAH vs. BLK: Which Stock Is the Better Value Option?

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Investors interested in Financial - Investment Management stocks are likely familiar with Noah Holdings (NOAH - Free Report) and BlackRock (BLK - 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.

Noah Holdings and BlackRock are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that NOAH has an improving earnings 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.

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.

NOAH currently has a forward P/E ratio of 4.75, while BLK has a forward P/E of 16.41. We also note that NOAH has a PEG ratio of 0.39. 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. BLK currently has a PEG ratio of 2.02.

Another notable valuation metric for NOAH is its P/B ratio of 0.83. 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, BLK has a P/B of 2.60.

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

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


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