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INTR vs. BAM: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Financial - Miscellaneous Services sector have probably already heard of Inter & Co. Inc. (INTR - Free Report) and Brookfield Asset Management (BAM - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Inter & Co. Inc. and Brookfield Asset Management are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that INTR has an improving earnings outlook. But this is just one factor that value investors are interested in.

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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

INTR currently has a forward P/E ratio of 7.43, while BAM has a forward P/E of 28.81. We also note that INTR has a PEG ratio of 0.23. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BAM currently has a PEG ratio of 2.06.

Another notable valuation metric for INTR is its P/B ratio of 1.2. 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, BAM has a P/B of 10.15.

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

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

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