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ATCO vs. VRTS: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Financial - Investment Management stocks have likely encountered both Atlas and Virtus Investment Partners (VRTS - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

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 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.

Both Atlas and Virtus Investment Partners have a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.

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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

ATCO currently has a forward P/E ratio of 8.15, while VRTS has a forward P/E of 8.97. We also note that ATCO has a PEG ratio of 0.49. 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. VRTS currently has a PEG ratio of 1.03.

Another notable valuation metric for ATCO is its P/B ratio of 0.54. 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, VRTS has a P/B of 1.59.

These metrics, and several others, help ATCO earn a Value grade of A, while VRTS has been given a Value grade of D.

Both ATCO and VRTS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ATCO is the superior value option right now.


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