Investors interested in Financial - Miscellaneous Services stocks are likely familiar with CI Financial Corp. (CIXX) and Blackstone Inc. (BX). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, CI Financial Corp. has a Zacks Rank of #2 (Buy), while Blackstone Inc. has a Zacks Rank of #3 (Hold). This means that CIXX'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 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
CIXX currently has a forward P/E ratio of 5.05, while BX has a forward P/E of 21.05. We also note that CIXX has a PEG ratio of 0.63. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BX currently has a PEG ratio of 2.06.
Another notable valuation metric for CIXX is its P/B ratio of 1.77. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, BX has a P/B of 3.80.
These are just a few of the metrics contributing to CIXX's Value grade of A and BX's Value grade of C.
CIXX stands above BX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CIXX is the superior value option right now.
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