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VCTR vs. TPG: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Financial - Investment Management sector might want to consider either Victory Capital Holdings (VCTR - Free Report) or TPG Inc. (TPG - 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.

Victory Capital Holdings has a Zacks Rank of #2 (Buy), while TPG Inc. has a Zacks Rank of #3 (Hold) right now. This means that VCTR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

VCTR currently has a forward P/E ratio of 6.89, while TPG has a forward P/E of 17.85. We also note that VCTR has a PEG ratio of 0.77. 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. TPG currently has a PEG ratio of 1.49.

Another notable valuation metric for VCTR is its P/B ratio of 2.08. 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, TPG has a P/B of 4.02.

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

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


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