Investors interested in stocks from the Financial - Investment Bank sector have probably already heard of WisdomTree Investments, Inc. (WETF) and Tradeweb Markets (TW). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, WisdomTree Investments, Inc. has a Zacks Rank of #2 (Buy), while Tradeweb Markets has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that WETF is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
WETF currently has a forward P/E ratio of 16.01, while TW has a forward P/E of 41.23. We also note that WETF has a PEG ratio of 2.20. 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. TW currently has a PEG ratio of 3.17.
Another notable valuation metric for WETF is its P/B ratio of 1.76. 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, TW has a P/B of 2.27.
These metrics, and several others, help WETF earn a Value grade of B, while TW has been given a Value grade of F.
WETF has seen stronger estimate revision activity and sports more attractive valuation metrics than TW, so it seems like value investors will conclude that WETF is the superior option right now.
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WisdomTree Investments, Inc. (WETF) : Free Stock Analysis Report
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