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JHG vs. CG: Which Stock Is the Better Value Option?

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Investors with an interest in Financial - Investment Management stocks have likely encountered both Janus Henderson Group plc (JHG - Free Report) and Carlyle Group (CG - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Janus Henderson Group plc is sporting a Zacks Rank of #2 (Buy), while Carlyle Group has a Zacks Rank of #3 (Hold). This means that JHG'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 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.

JHG currently has a forward P/E ratio of 10.94, while CG has a forward P/E of 12.85. We also note that JHG has a PEG ratio of 0.79. 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. CG currently has a PEG ratio of 1.29.

Another notable valuation metric for JHG is its P/B ratio of 1.33. 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, CG has a P/B of 2.73.

Based on these metrics and many more, JHG holds a Value grade of A, while CG has a Value grade of D.

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


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