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IX vs. VIRT: Which Stock Is the Better Value Option?

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Investors interested in Financial - Miscellaneous Services stocks are likely familiar with Orix (IX - Free Report) and Virtu Financial (VIRT - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Orix and Virtu Financial are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. 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 factor that value investors are interested in.

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.

IX currently has a forward P/E ratio of 6.16, while VIRT has a forward P/E of 14. We also note that IX has a PEG ratio of 0.85. 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. VIRT currently has a PEG ratio of 2.80.

Another notable valuation metric for IX is its P/B ratio of 0.71. 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, VIRT has a P/B of 2.88.

These metrics, and several others, help IX earn a Value grade of A, while VIRT has been given a Value grade of D.

IX stands above VIRT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that IX is the superior value option right now.


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