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PNC vs. TW: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Financial - Investment Bank sector have probably already heard of The PNC Financial Services Group, Inc (PNC - Free Report) and Tradeweb Markets (TW - 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

The PNC Financial Services Group, Inc and Tradeweb Markets are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PNC 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 analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

PNC currently has a forward P/E ratio of 11.06, while TW has a forward P/E of 39.79. We also note that PNC has a PEG ratio of 1.37. 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. TW currently has a PEG ratio of 2.57.

Another notable valuation metric for PNC is its P/B ratio of 1.24. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, TW has a P/B of 4.99.

Based on these metrics and many more, PNC holds a Value grade of B, while TW has a Value grade of F.

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


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