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JMP vs. TW: Which Stock Is the Better Value Option?

Zacks Equity Research
·2 mins read

Investors looking for stocks in the Financial - Investment Bank sector might want to consider either JMP (JMP) or Tradeweb Markets (TW). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Right now, both JMP and Tradeweb Markets are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

JMP currently has a forward P/E ratio of 7.66, while TW has a forward P/E of 34. We also note that JMP has a PEG ratio of 0.77. 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. TW currently has a PEG ratio of 2.38.

Another notable valuation metric for JMP is its P/B ratio of 0.72. 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, TW has a P/B of 1.96.

These metrics, and several others, help JMP earn a Value grade of B, while TW has been given a Value grade of F.

Both JMP and TW are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that JMP is the superior value option right now.


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JMP Group LLC (JMP) : Free Stock Analysis Report
 
Tradeweb Markets Inc. (TW) : Free Stock Analysis Report
 
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