IX vs. BX: Which Stock Should Value Investors Buy Now?
IInvestors looking for stocks in the financial services – miscellaneous services sector might consider Orix (IX) or Blackstone Inc. (BX). But which of these two stocks offers investors the best value opportunity right now? Let’s take a closer look.
Everyone has their own methods for finding high-value opportunities, but our model includes pairing an impressive score in the Value category of our Style Scores system with a strong Zacks ranking. The proven Zacks ranking emphasizes companies with positive estimate revision trends, and our style scores highlight stocks with specific characteristics.
Currently, Orix sports a Zacks rank of #2 (Buy), while Blackstone Inc. has a Zacks rank of #3 (Hold). Investors should feel comfortable knowing that IX has likely seen a stronger improvement in its earnings outlook than BX recently. However, value investors will care about much more than that.
Value investors analyze a variety of traditional and time-tested metrics to help find companies they believe are undervalued at their current stock price level.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company’s fair value.
IX currently has a forward P/E ratio of 8.32, while BX has a forward P/E of 21.30. We also note that IX has a PEG ratio of 0.33. This measure is used in the same way as the famous P/E ratio, but the PEG ratio also takes into account the growth rate of the stock’s expected earnings. BX currently has a PEG ratio of 0.89.
Another notable valuation metric for IX is its P/E ratio of 0.78. Investors use the P/E ratio to compare a stock’s market value to its book value, which is defined as total assets minus total liabilities. In comparison, BX has a P/B of 3.68.
These measures, and several others, help IX earn an A value rating, while BX received a C value rating.
IX ranks above BX thanks to its strong earnings outlook, and based on these valuation numbers, we also believe that IX is the superior value option at this time.
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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.