Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either Intercorp Financial Services Inc. (IFS) or Blackstone Inc. (BX). 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.
Intercorp Financial Services Inc. and Blackstone Inc. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that IFS likely has seen a stronger improvement to its earnings outlook than BX has recently. However, value investors will care about much more than just this.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
IFS currently has a forward P/E ratio of 8.67, while BX has a forward P/E of 18.97. We also note that IFS has a PEG ratio of 0.69. 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. BX currently has a PEG ratio of 1.35.
Another notable valuation metric for IFS is its P/B ratio of 1.56. 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, BX has a P/B of 3.97.
These metrics, and several others, help IFS earn a Value grade of A, while BX has been given a Value grade of D.
IFS sticks out from BX in both our Zacks Rank and Style Scores models, so value investors will likely feel that IFS is the better option right now.
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Intercorp Financial Services Inc. (IFS): Free Stock Analysis Report
Blackstone Inc. (BX): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).