Back to top

Image: Bigstock

GHLD vs. MCO: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors with an interest in Financial - Miscellaneous Services stocks have likely encountered both Guild Holdings Company (GHLD - Free Report) and Moody's (MCO - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 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.

Right now, Guild Holdings Company is sporting a Zacks Rank of #2 (Buy), while Moody's has a Zacks Rank of #3 (Hold). This means that GHLD'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.

GHLD currently has a forward P/E ratio of 8.23, while MCO has a forward P/E of 32.19. We also note that GHLD has a PEG ratio of 0.77. 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. MCO currently has a PEG ratio of 2.58.

Another notable valuation metric for GHLD is its P/B ratio of 0.65. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, MCO has a P/B of 20.51.

These are just a few of the metrics contributing to GHLD's Value grade of B and MCO's Value grade of F.

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


See More Zacks Research for These Tickers


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


Moody's Corporation (MCO) - free report >>

Guild Holdings Company (GHLD) - free report >>

Published in