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MS vs. TW: Which Stock Should Value Investors Buy Now?

Zacks Equity Research

Investors with an interest in Financial - Investment Bank stocks have likely encountered both Morgan Stanley (MS) and Tradeweb Markets (TW). But which of these two companies is the best option for those looking for undervalued stocks? 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.

Both Morgan Stanley and Tradeweb Markets have 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 piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

MS currently has a forward P/E ratio of 10.16, while TW has a forward P/E of 45.41. We also note that MS has a PEG ratio of 1.05. 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. TW currently has a PEG ratio of 3.49.

Another notable valuation metric for MS is its P/B ratio of 1.09. 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 2.24.

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

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


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Morgan Stanley (MS) : Free Stock Analysis Report
 
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