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IX vs. AXP: Which Stock Should Value Investors Buy Now?

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·2 min read
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Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either Orix (IX) or American Express (AXP). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Orix is sporting a Zacks Rank of #2 (Buy), while American Express has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that IX likely has seen a stronger improvement to its earnings outlook than AXP has recently. But this is just one factor that value investors are interested in.

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.

IX currently has a forward P/E ratio of 9.74, while AXP has a forward P/E of 18.22. We also note that IX has a PEG ratio of 0.73. 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. AXP currently has a PEG ratio of 0.91.

Another notable valuation metric for IX is its P/B ratio of 0.84. 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, AXP has a P/B of 4.99.

These are just a few of the metrics contributing to IX's Value grade of A and AXP's Value grade of C.

IX has seen stronger estimate revision activity and sports more attractive valuation metrics than AXP, so it seems like value investors will conclude that IX is the superior option right now.

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Orix Corp Ads (IX) : Free Stock Analysis Report
American Express Company (AXP) : Free Stock Analysis Report
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Zacks Investment Research