GBOOY vs. BAM: Which Stock Is the Better Value Option?
Investors with an interest in Financial - Miscellaneous Services stocks have likely encountered both Grupo Financiero Banorte SAB de CV (GBOOY) and Brookfield Asset Management (BAM). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, Grupo Financiero Banorte SAB de CV is sporting a Zacks Rank of #2 (Buy), while Brookfield Asset Management has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GBOOY has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
GBOOY currently has a forward P/E ratio of 8.01, while BAM has a forward P/E of 25.25. We also note that GBOOY has a PEG ratio of 0.69. 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. BAM currently has a PEG ratio of 2.01.
Another notable valuation metric for GBOOY is its P/B ratio of 2.10. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, BAM has a P/B of 6.15.
These metrics, and several others, help GBOOY earn a Value grade of B, while BAM has been given a Value grade of D.
GBOOY sticks out from BAM in both our Zacks Rank and Style Scores models, so value investors will likely feel that GBOOY is the better option right now.
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Grupo Financiero Banorte SAB de CV (GBOOY) : Free Stock Analysis Report
Brookfield Asset Management Ltd. (BAM) : Free Stock Analysis Report
