Investors with an interest in Financial - Investment Management stocks have likely encountered both T. Rowe Price (TROW) and Hamilton Lane (HLNE). 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
T. Rowe Price and Hamilton Lane are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. This means that TROW's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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.
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.
TROW currently has a forward P/E ratio of 14.46, while HLNE has a forward P/E of 28.28. We also note that TROW has a PEG ratio of 1.60. 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. HLNE currently has a PEG ratio of 1.89.
Another notable valuation metric for TROW is its P/B ratio of 4.08. 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, HLNE has a P/B of 17.89.
These are just a few of the metrics contributing to TROW's Value grade of B and HLNE's Value grade of D.
TROW sticks out from HLNE in both our Zacks Rank and Style Scores models, so value investors will likely feel that TROW is the better option right now.
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T. Rowe Price Group, Inc. (TROW) : Free Stock Analysis Report
Hamilton Lane Inc. (HLNE) : Free Stock Analysis Report
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