LU vs. MCO: Which Stock Is the Better Value Option?
Investors interested in Financial - Miscellaneous Services stocks are likely familiar with Lufax Holding Ltd. Sponsored ADR (LU) and Moody's (MCO). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Lufax Holding Ltd. Sponsored ADR and Moody's are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that LU has an improving earnings outlook. However, value investors will care about much more than just this.
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.
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.
LU currently has a forward P/E ratio of 13.65, while MCO has a forward P/E of 27.67. We also note that LU has a PEG ratio of 1.01. 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. MCO currently has a PEG ratio of 2.77.
Another notable valuation metric for LU is its P/B ratio of 2.86. 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, MCO has a P/B of 30.98.
These metrics, and several others, help LU earn a Value grade of B, while MCO has been given a Value grade of D.
LU is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that LU is likely the superior value option right now.
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Lufax Holding Ltd. Sponsored ADR (LU) : Free Stock Analysis Report
Moodys Corporation (MCO) : Free Stock Analysis Report
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