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LAZ or HRGLY: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Financial - Investment Management sector might want to consider either Lazard Ltd (LAZ - Free Report) or HARGREAVES LNSD . 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Lazard Ltd and HARGREAVES LNSD are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that LAZ has an improving earnings outlook. But this is only part of the picture 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 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.

LAZ currently has a forward P/E ratio of 10.36, while HRGLY has a forward P/E of 39.17. We also note that LAZ has a PEG ratio of 0.99. 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. HRGLY currently has a PEG ratio of 2.94.

Another notable valuation metric for LAZ is its P/B ratio of 5.53. 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, HRGLY has a P/B of 31.73.

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

LAZ 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 LAZ is likely the superior value option right now.


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