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GS or WETF: Which Is the Better Value Stock Right Now?

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Investors with an interest in Financial - Investment Bank stocks have likely encountered both Goldman Sachs (GS) and WisdomTree Investments, Inc. (WETF). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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, Goldman Sachs is sporting a Zacks Rank of #1 (Strong Buy), while WisdomTree Investments, Inc. has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GS has an improving earnings 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.

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.

GS currently has a forward P/E ratio of 7.64, while WETF has a forward P/E of 22.21. We also note that GS 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. WETF currently has a PEG ratio of 1.44.

Another notable valuation metric for GS is its P/B ratio of 1.21. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, WETF has a P/B of 3.60.

These metrics, and several others, help GS earn a Value grade of B, while WETF has been given a Value grade of D.

GS stands above WETF thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GS is the superior value option right now.


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The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report
 
WisdomTree Investments, Inc. (WETF) : Free Stock Analysis Report
 
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