Investors looking for stocks in the Financial - Investment Management sector might want to consider either Janus Henderson Group plc (JHG) or Carlyle Group (CG). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Janus Henderson Group plc is sporting a Zacks Rank of #1 (Strong Buy), while Carlyle Group has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that JHG is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
JHG currently has a forward P/E ratio of 12.40, while CG has a forward P/E of 13.32. We also note that JHG has a PEG ratio of 0.60. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CG currently has a PEG ratio of 1.33.
Another notable valuation metric for JHG is its P/B ratio of 1.46. 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, CG has a P/B of 2.82.
Based on these metrics and many more, JHG holds a Value grade of B, while CG has a Value grade of D.
JHG has seen stronger estimate revision activity and sports more attractive valuation metrics than CG, so it seems like value investors will conclude that JHG is the superior option right now.
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