NMR or MKTX: Which Is the Better Value Stock Right Now?

Investors interested in stocks from the Financial - Investment Bank sector have probably already heard of Nomura Holdings (NMR) and MarketAxess (MKTX). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Nomura Holdings and MarketAxess are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that NMR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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 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.

NMR currently has a forward P/E ratio of 10.99, while MKTX has a forward P/E of 14.06. We also note that NMR has a PEG ratio of 2.53. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MKTX currently has a PEG ratio of 3.64.

Another notable valuation metric for NMR is its P/B ratio of 1.01. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, MKTX has a P/B of 3.33.

Based on these metrics and many more, NMR holds a Value grade of A, while MKTX has a Value grade of C.

NMR stands above MKTX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NMR is the superior value option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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