Investors interested in stocks from the Financial - Investment Management sector have probably already heard of Victory Capital Holdings (VCTR) and Oaktree Capital Group, LLC (OAK). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Victory Capital Holdings and Oaktree Capital Group, LLC are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that VCTR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
VCTR currently has a forward P/E ratio of 6.01, while OAK has a forward P/E of 15.37. We also note that VCTR has a PEG ratio of 0.53. 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. OAK currently has a PEG ratio of 1.02.
Another notable valuation metric for VCTR is its P/B ratio of 1.61. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, OAK has a P/B of 3.30.
Based on these metrics and many more, VCTR holds a Value grade of A, while OAK has a Value grade of D.
VCTR is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that VCTR is likely the superior value option right now.
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Victory Capital Holdings, Inc. (VCTR) : Free Stock Analysis Report
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