NMR vs. TW: Which Stock Is the Better Value Option?
Investors interested in Financial - Investment Bank stocks are likely familiar with Nomura Holdings (NMR) 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 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, Nomura Holdings is sporting a Zacks Rank of #2 (Buy), while Tradeweb Markets has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that NMR likely has seen a stronger improvement to its earnings outlook than TW has recently. But this is only part of the picture 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
NMR currently has a forward P/E ratio of 5.55, while TW has a forward P/E of 51.26. We also note that NMR has a PEG ratio of 2.60. 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. TW currently has a PEG ratio of 4.87.
Another notable valuation metric for NMR is its P/B ratio of 0.66. 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 3.40.
These are just a few of the metrics contributing to NMR's Value grade of B and TW's Value grade of F.
NMR has seen stronger estimate revision activity and sports more attractive valuation metrics than TW, so it seems like value investors will conclude that NMR is the superior 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
Nomura Holdings Inc ADR (NMR) : Free Stock Analysis Report
Tradeweb Markets Inc. (TW) : Free Stock Analysis Report
To read this article on Zacks.com click here.
