Investors with an interest in Financial - Investment Management stocks have likely encountered both Woori Bank (WF - Free Report) and Franklin Resources (BEN - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
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 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.
Woori Bank has a Zacks Rank of #1 (Strong Buy), while Franklin Resources has a Zacks Rank of #5 (Strong Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that WF is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
WF currently has a forward P/E ratio of 5.08, while BEN has a forward P/E of 10.88. We also note that WF has a PEG ratio of 0.85. 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. BEN currently has a PEG ratio of 1.09.
Another notable valuation metric for WF is its P/B ratio of 0.48. 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, BEN has a P/B of 1.63.
Based on these metrics and many more, WF holds a Value grade of B, while BEN has a Value grade of C.
WF 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 WF is likely the superior value option right now.