Investors interested in stocks from the Financial - Miscellaneous Services sector have probably already heard of Orix (IX) and Oaktree Specialty Lending (OCSL). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Orix and Oaktree Specialty Lending are both sporting a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one factor that value investors are interested in.
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.
IX currently has a forward P/E ratio of 7.03, while OCSL has a forward P/E of 10.82. We also note that IX has a PEG ratio of 0.98. 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. OCSL currently has a PEG ratio of 5.41.
Another notable valuation metric for IX is its P/B ratio of 0.79. 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, OCSL has a P/B of 0.83.
These metrics, and several others, help IX earn a Value grade of A, while OCSL has been given a Value grade of C.
Both IX and OCSL are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that IX is the superior value option right now.
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Orix Corp Ads (IX) : Free Stock Analysis Report
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