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IX vs. SLFPY: 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 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks 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. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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 6.56, while SLFPY has a forward P/E of 13.98. We also note that IX has a PEG ratio of 0.91. 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. SLFPY currently has a PEG ratio of 4.82.

Another notable valuation metric for IX is its P/B ratio of 0.77. 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, SLFPY has a P/B of 0.89.

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

IX has seen stronger estimate revision activity and sports more attractive valuation metrics than SLFPY, so it seems like value investors will conclude that IX is the superior option right now.


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