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PFG vs. TROW: Which Stock Should Value Investors Buy Now?
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Investors with an interest in Financial - Investment Management stocks have likely encountered both Principal Financial (PFG - Free Report) and T. Rowe Price (TROW - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Principal Financial has a Zacks Rank of #2 (Buy), while T. Rowe Price 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 PFG 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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
PFG currently has a forward P/E ratio of 10.46, while TROW has a forward P/E of 14.92. We also note that PFG has a PEG ratio of 1.23. 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. TROW currently has a PEG ratio of 2.49.
Another notable valuation metric for PFG is its P/B ratio of 1.73. 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, TROW has a P/B of 2.55.
Based on these metrics and many more, PFG holds a Value grade of A, while TROW has a Value grade of C.
PFG is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that PFG is likely the superior value option right now.
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PFG vs. TROW: Which Stock Should Value Investors Buy Now?
Investors with an interest in Financial - Investment Management stocks have likely encountered both Principal Financial (PFG - Free Report) and T. Rowe Price (TROW - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Principal Financial has a Zacks Rank of #2 (Buy), while T. Rowe Price 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 PFG 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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
PFG currently has a forward P/E ratio of 10.46, while TROW has a forward P/E of 14.92. We also note that PFG has a PEG ratio of 1.23. 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. TROW currently has a PEG ratio of 2.49.
Another notable valuation metric for PFG is its P/B ratio of 1.73. 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, TROW has a P/B of 2.55.
Based on these metrics and many more, PFG holds a Value grade of A, while TROW has a Value grade of C.
PFG is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that PFG is likely the superior value option right now.