Investors interested in stocks from the Financial - Miscellaneous Services sector have probably already heard of Piper Sandler Companies (PIPR) and Brookfield Asset Management (BAM). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Piper Sandler Companies and Brookfield Asset Management are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PIPR has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
PIPR currently has a forward P/E ratio of 18.67, while BAM has a forward P/E of 25.61. We also note that PIPR has a PEG ratio of 1.76. 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. BAM currently has a PEG ratio of 1.83.
Another notable valuation metric for PIPR is its P/B ratio of 3.9. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, BAM has a P/B of 8.73.
These metrics, and several others, help PIPR earn a Value grade of B, while BAM has been given a Value grade of F.
PIPR has seen stronger estimate revision activity and sports more attractive valuation metrics than BAM, so it seems like value investors will conclude that PIPR is the superior option right now.
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Piper Sandler Companies (PIPR): Free Stock Analysis Report
Brookfield Asset Management Ltd. (BAM): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).