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VCTR vs. OAK: Which Stock Is the Better Value Option?

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Investors with an interest in Financial - Investment Management stocks have likely encountered both Victory Capital Holdings (VCTR - Free Report) and Oaktree Capital Group, LLC . 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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Right now, Victory Capital Holdings is sporting a Zacks Rank of #2 (Buy), while Oaktree Capital Group, LLC has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that VCTR has an improving earnings outlook. However, value investors will care about much more than just this.

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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

VCTR currently has a forward P/E ratio of 7.05, while OAK has a forward P/E of 14.30. We also note that VCTR has a PEG ratio of 0.44. 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. OAK currently has a PEG ratio of 1.22.

Another notable valuation metric for VCTR is its P/B ratio of 1.81. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, OAK has a P/B of 3.18.

These are just a few of the metrics contributing to VCTR's Value grade of A and OAK's Value grade of D.

VCTR 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 VCTR is likely the superior value option right now.


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