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SCHW vs. HOOD: Which Stock Is the Better Value Option?
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Investors with an interest in Financial - Investment Bank stocks have likely encountered both The Charles Schwab Corporation (SCHW - Free Report) and Robinhood Markets, Inc. (HOOD - 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, The Charles Schwab Corporation has a Zacks Rank of #2 (Buy), while Robinhood Markets, Inc. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that SCHW likely has seen a stronger improvement to its earnings outlook than HOOD has recently. But this is only part of the picture for value investors.
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.
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.
SCHW currently has a forward P/E ratio of 14.56, while HOOD has a forward P/E of 51.61. We also note that SCHW has a PEG ratio of 0.82. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HOOD currently has a PEG ratio of 2.20.
Another notable valuation metric for SCHW is its P/B ratio of 3.66. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, HOOD has a P/B of 8.69.
These metrics, and several others, help SCHW earn a Value grade of B, while HOOD has been given a Value grade of F.
SCHW sticks out from HOOD in both our Zacks Rank and Style Scores models, so value investors will likely feel that SCHW is the better option right now.
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SCHW vs. HOOD: Which Stock Is the Better Value Option?
Investors with an interest in Financial - Investment Bank stocks have likely encountered both The Charles Schwab Corporation (SCHW - Free Report) and Robinhood Markets, Inc. (HOOD - 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, The Charles Schwab Corporation has a Zacks Rank of #2 (Buy), while Robinhood Markets, Inc. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that SCHW likely has seen a stronger improvement to its earnings outlook than HOOD has recently. But this is only part of the picture for value investors.
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.
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.
SCHW currently has a forward P/E ratio of 14.56, while HOOD has a forward P/E of 51.61. We also note that SCHW has a PEG ratio of 0.82. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HOOD currently has a PEG ratio of 2.20.
Another notable valuation metric for SCHW is its P/B ratio of 3.66. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, HOOD has a P/B of 8.69.
These metrics, and several others, help SCHW earn a Value grade of B, while HOOD has been given a Value grade of F.
SCHW sticks out from HOOD in both our Zacks Rank and Style Scores models, so value investors will likely feel that SCHW is the better option right now.