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IX or SLFPY: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either Orix (IX - Free Report) or Standard Life PLC Unsponsored ADR (SLFPY - 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.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Orix is sporting a Zacks Rank of #2 (Buy), while Standard Life PLC Unsponsored ADR has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that IX is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

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.

IX currently has a forward P/E ratio of 6.92, while SLFPY has a forward P/E of 12.14. We also note that IX has a PEG ratio of 0.98. 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. SLFPY currently has a PEG ratio of 2.13.

Another notable valuation metric for IX is its P/B ratio of 0.78. 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, SLFPY has a P/B of 1.09.

Based on these metrics and many more, IX holds a Value grade of A, while SLFPY has a Value grade of C.

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


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