Investors looking for stocks in the Financial - Investment Management sector might want to consider either Victory Capital Holdings (VCTR) or Eaton Vance (EV). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Both Victory Capital Holdings and Eaton Vance have a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is only part of the picture for value investors.
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.
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.
VCTR currently has a forward P/E ratio of 5.56, while EV has a forward P/E of 13.57. We also note that VCTR has a PEG ratio of 0.14. 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. EV currently has a PEG ratio of 2.02.
Another notable valuation metric for VCTR is its P/B ratio of 2.94. 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, EV has a P/B of 4.66.
Based on these metrics and many more, VCTR holds a Value grade of A, while EV has a Value grade of C.
Both VCTR and EV are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that VCTR is the superior value option right now.