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from the world of economics and financeInvestors interested in stocks from the Financial - Investment Bank sector have probably already heard of The PNC Financial Services Group, Inc (PNC) and Tradeweb Markets (TW). But which of these two stocks presents investors with the better value opportunity right now? Let's 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.
The PNC Financial Services Group, Inc has a Zacks Rank of #2 (Buy), while Tradeweb Markets has a Zacks Rank of #3 (Hold) right now. This means that PNC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
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.
PNC currently has a forward P/E ratio of 13.01, while TW has a forward P/E of 38.47. We also note that PNC has a PEG ratio of 1.61. 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. TW currently has a PEG ratio of 1.93.
Another notable valuation metric for PNC is its P/B ratio of 1.45. 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 4.81.
These are just a few of the metrics contributing to PNC's Value grade of B and TW's Value grade of F.
PNC is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that PNC is likely the superior value option right now.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.