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AGM or ZG: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Financial - Mortgage & Related Services sector have probably already heard of Federal Agricultural Mortgage (AGM - Free Report) and Zillow Group (ZG - 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.

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.

Federal Agricultural Mortgage and Zillow Group are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that AGM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 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.

AGM currently has a forward P/E ratio of 9.55, while ZG has a forward P/E of 44.05. We also note that AGM has a PEG ratio of 0.87. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ZG currently has a PEG ratio of 1.43.

Another notable valuation metric for AGM is its P/B ratio of 1.62. 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, ZG has a P/B of 3.8.

These metrics, and several others, help AGM earn a Value grade of A, while ZG has been given a Value grade of F.

AGM sticks out from ZG in both our Zacks Rank and Style Scores models, so value investors will likely feel that AGM is the better option right now.


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Federal Agricultural Mortgage Corporation (AGM) - free report >>

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