In This Article:
Investors interested in stocks from the Financial - Miscellaneous Services sector have probably already heard of Intercorp Financial Services Inc. (IFS) and Blackstone Inc. (BX). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Intercorp Financial Services Inc. is sporting a Zacks Rank of #2 (Buy), while Blackstone Inc. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that IFS likely has seen a stronger improvement to its earnings outlook than BX has recently. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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 8.05, while BX has a forward P/E of 25.27. We also note that IFS has a PEG ratio of 0.34. 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. BX currently has a PEG ratio of 0.97.
Another notable valuation metric for IFS is its P/B ratio of 1.33. 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, BX has a P/B of 5.73.
Based on these metrics and many more, IFS holds a Value grade of B, while BX has a Value grade of D.
IFS has seen stronger estimate revision activity and sports more attractive valuation metrics than BX, so it seems like value investors will conclude that IFS is the superior option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Intercorp Financial Services Inc. (IFS) : Free Stock Analysis Report