ATCO or VRTS: Which Is the Better Value Stock Right Now?
Investors with an interest in Financial - Investment Management stocks have likely encountered both Atlas (ATCO) and Virtus Investment Partners (VRTS). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Atlas has a Zacks Rank of #1 (Strong Buy), while Virtus Investment Partners has a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that ATCO likely has seen a stronger improvement to its earnings outlook than VRTS has recently. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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 9.25, while VRTS has a forward P/E of 10.39. We also note that ATCO has a PEG ratio of 0.51. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. VRTS currently has a PEG ratio of 1.20.
Another notable valuation metric for ATCO is its P/B ratio of 0.58. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, VRTS has a P/B of 1.90.
These are just a few of the metrics contributing to ATCO's Value grade of A and VRTS's Value grade of F.
ATCO has seen stronger estimate revision activity and sports more attractive valuation metrics than VRTS, so it seems like value investors will conclude that ATCO is the superior option right now.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.