Yahoo Finance VIRT vs. MCO: Which Stock Is the Better Value Option?
Investors interested in Financial - Miscellaneous Services stocks are likely familiar with Virtu Financial (VIRT) and Moody's (MCO). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Virtu Financial has a Zacks Rank of #2 (Buy), while Moody's 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 VIRT is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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.
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.
VIRT currently has a forward P/E ratio of 9.51, while MCO has a forward P/E of 39.82. We also note that VIRT has a PEG ratio of 0.43. 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. MCO currently has a PEG ratio of 3.31.
Another notable valuation metric for VIRT is its P/B ratio of 2.60. 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, MCO has a P/B of 20.81.
These are just a few of the metrics contributing to VIRT's Value grade of B and MCO's Value grade of F.
VIRT sticks out from MCO in both our Zacks Rank and Style Scores models, so value investors will likely feel that VIRT is the better option right now.
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Virtu Financial, Inc. (VIRT) : Free Stock Analysis Report
Moody's Corporation (MCO) : Free Stock Analysis Report
