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GSBD vs. NEWT: Which Stock Is the Better Value Option?

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Investors interested in Financial - SBIC & Commercial Industry stocks are likely familiar with Goldman Sachs BDC (GSBD - Free Report) and Newtek (NEWT - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Goldman Sachs BDC has a Zacks Rank of #2 (Buy), while Newtek has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GSBD is likely seeing its earnings outlook improve to a greater extent. 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

GSBD currently has a forward P/E ratio of 10.94, while NEWT has a forward P/E of 11.19. We also note that GSBD has a PEG ratio of 2.19. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NEWT currently has a PEG ratio of 3.73.

Another notable valuation metric for GSBD is its P/B ratio of 1.18. 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, NEWT has a P/B of 1.39.

These metrics, and several others, help GSBD earn a Value grade of B, while NEWT has been given a Value grade of D.

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


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NewtekOne, Inc. (NEWT) - free report >>

Goldman Sachs BDC, Inc. (GSBD) - free report >>