BFH vs. FUTU: Which Stock Is the Better Value Option?
Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either Bread Financial Holdings (BFH) or Futu Holdings Limited Sponsored ADR (FUTU). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Bread Financial Holdings is sporting a Zacks Rank of #1 (Strong Buy), while Futu Holdings Limited Sponsored ADR has a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that BFH likely has seen a stronger improvement to its earnings outlook than FUTU has recently. But this is only part of the picture for value investors.
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 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.
BFH currently has a forward P/E ratio of 8.88, while FUTU has a forward P/E of 11.50. We also note that BFH has a PEG ratio of 0.67. 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. FUTU currently has a PEG ratio of 1.21.
Another notable valuation metric for BFH is its P/B ratio of 1.23. 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, FUTU has a P/B of 3.08.
These are just a few of the metrics contributing to BFH's Value grade of B and FUTU's Value grade of C.
BFH sticks out from FUTU in both our Zacks Rank and Style Scores models, so value investors will likely feel that BFH is the better option right now.
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See Stocks Now >>Bread Financial Holdings, Inc. (BFH) : Free Stock Analysis Report
Futu Holdings Limited Sponsored ADR (FUTU) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
