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BBSEY vs. MCO: Which Stock Is the Better Value Option?
Investors interested in stocks from the Financial - Miscellaneous Services sector have probably already heard of BB Seguridade Participacoes SA (BBSEY - Free Report) and Moody's (MCO - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, both BB Seguridade Participacoes SA and Moody's are holding a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. 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.
BBSEY currently has a forward P/E ratio of 8.91, while MCO has a forward P/E of 33.85. We also note that BBSEY has a PEG ratio of 1.15. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MCO currently has a PEG ratio of 2.64.
Another notable valuation metric for BBSEY is its P/B ratio of 6.21. 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, MCO has a P/B of 22.86.
Based on these metrics and many more, BBSEY holds a Value grade of B, while MCO has a Value grade of F.
Both BBSEY and MCO are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BBSEY is the superior value option right now.