Yahoo Finance NOAH or BEN: Which Is the Better Value Stock Right Now?
Investors interested in Financial - Investment Management stocks are likely familiar with Noah Holdings (NOAH) and Franklin Resources (BEN). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Noah Holdings has a Zacks Rank of #2 (Buy), while Franklin Resources has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that NOAH is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.
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.
NOAH currently has a forward P/E ratio of 8.04, while BEN has a forward P/E of 13.89. We also note that NOAH has a PEG ratio of 3.54. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BEN currently has a PEG ratio of 8.79.
Another notable valuation metric for NOAH is its P/B ratio of 0.93. 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, BEN has a P/B of 1.28.
These metrics, and several others, help NOAH earn a Value grade of B, while BEN has been given a Value grade of C.
NOAH 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 NOAH is likely the superior value option right now.
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Noah Holdings Ltd. (NOAH) : Free Stock Analysis Report
Franklin Resources, Inc. (BEN) : Free Stock Analysis Report
