Investors with an interest in Financial – Investment Management stocks have likely encountered both Virtus Investment Partners (VRTS) and Apollo Global Management, LLC (APO). 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, Virtus Investment Partners has a Zacks Rank of #1 (Strong Buy), while Apollo Global Management, LLC has a Zacks Rank of #3 (Hold). This means that VRTS’s earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
VRTS currently has a forward P/E ratio of 8.56, while APO has a forward P/E of 20.43. We also note that VRTS has a PEG ratio of 0.97. 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. APO currently has a PEG ratio of 1.45.
Another notable valuation metric for VRTS is its P/B ratio of 1.50. The P/B ratio pits a stock’s market value against its book value, which is defined as total assets minus total liabilities. For comparison, APO has a P/B of 4.64.
These metrics, and several others, help VRTS earn a Value grade of B, while APO has been given a Value grade of C.
VRTS sticks out from APO in both our Zacks Rank and Style Scores models, so value investors will likely feel that VRTS is the better option right now.
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