VCTR vs. BLK: Which Stock Is the Better Value Option?
Investors interested in Financial - Investment Management stocks are likely familiar with Victory Capital Holdings (VCTR) and BlackRock (BLK). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Victory Capital Holdings and BlackRock are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that VCTR has an improving earnings outlook. But this is only part of the picture for value investors.
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 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.
VCTR currently has a forward P/E ratio of 7.74, while BLK has a forward P/E of 20.93. We also note that VCTR has a PEG ratio of 0.52. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BLK currently has a PEG ratio of 1.83.
Another notable valuation metric for VCTR is its P/B ratio of 2.42. 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, BLK has a P/B of 3.13.
Based on these metrics and many more, VCTR holds a Value grade of A, while BLK has a Value grade of D.
VCTR stands above BLK thanks to its solid earnings outlook, and based on these valuation figures, we also feel that VCTR is the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Victory Capital Holdings, Inc. (VCTR) : Free Stock Analysis Report
BlackRock, Inc. (BLK) : Free Stock Analysis Report
