Investors interested in Financial - Investment Bank stocks are likely familiar with JMP (JMP) and Tradeweb Markets (TW). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, both JMP and Tradeweb Markets are holding a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.
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.
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.
JMP currently has a forward P/E ratio of 6.77, while TW has a forward P/E of 37.35. We also note that JMP has a PEG ratio of 0.68. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TW currently has a PEG ratio of 2.50.
Another notable valuation metric for JMP is its P/B ratio of 0.75. 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, TW has a P/B of 2.30.
These metrics, and several others, help JMP earn a Value grade of A, while TW has been given a Value grade of F.
Both JMP and TW are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that JMP is the superior value option right now.