Back to top

Image: Bigstock

LSEGY or NDAQ: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in stocks from the Securities and Exchanges sector have probably already heard of London Stock Exchange Group plc - Unsponsored ADR (LSEGY - Free Report) and Nasdaq (NDAQ - 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.

London Stock Exchange Group plc - Unsponsored ADR and Nasdaq are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that LSEGY likely has seen a stronger improvement to its earnings outlook than NDAQ has recently. But this is just one piece of the puzzle for value investors.

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.

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.

LSEGY currently has a forward P/E ratio of 18.83, while NDAQ has a forward P/E of 23.55. We also note that LSEGY has a PEG ratio of 1.59. 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. NDAQ currently has a PEG ratio of 1.82.

Another notable valuation metric for LSEGY is its P/B ratio of 2.09. 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, NDAQ has a P/B of 4.28.

These are just a few of the metrics contributing to LSEGY's Value grade of B and NDAQ's Value grade of D.

LSEGY 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 LSEGY is likely the superior value option right now.

Zacks' 7 Best Strong Buy Stocks (New Research Report)

Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.

Click Here, It's Really Free

Published in