Investors interested in stocks from the Financial - Investment Management sector have probably already heard of Eaton Vance (EV) and Hargreaves Lansdown plc (HRGLY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Eaton Vance and Hargreaves Lansdown plc are sporting Zacks Ranks of #2 (Buy) and #5 (Strong Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that EV is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.
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.
EV currently has a forward P/E ratio of 13.20, while HRGLY has a forward P/E of 34.18. We also note that EV has a PEG ratio of 2.49. 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. HRGLY currently has a PEG ratio of 2.82.
Another notable valuation metric for EV is its P/B ratio of 4.61. 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, HRGLY has a P/B of 21.98.
Based on these metrics and many more, EV holds a Value grade of A, while HRGLY has a Value grade of F.
EV sticks out from HRGLY in both our Zacks Rank and Style Scores models, so value investors will likely feel that EV is the better option right now.
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Eaton Vance Corporation (EV) : Free Stock Analysis Report
Hargreaves Lansdown plc (HRGLY) : Free Stock Analysis Report
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