Investors with an interest in Financial - Investment Bank stocks have likely encountered both TD Ameritrade (AMTD) and Tradeweb Markets (TW). 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.
TD Ameritrade has a Zacks Rank of #2 (Buy), while Tradeweb Markets has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that AMTD has an improving earnings outlook. However, value investors will care about much more than just this.
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.
AMTD currently has a forward P/E ratio of 12, while TW has a forward P/E of 46.52. We also note that AMTD has a PEG ratio of 1.59. 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. TW currently has a PEG ratio of 2.13.
Another notable valuation metric for AMTD is its P/B ratio of 2.11. 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, TW has a P/B of 2.84.
These metrics, and several others, help AMTD earn a Value grade of A, while TW has been given a Value grade of F.
AMTD sticks out from TW in both our Zacks Rank and Style Scores models, so value investors will likely feel that AMTD is the better option right now.
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TD Ameritrade Holding Corporation (AMTD) : Free Stock Analysis Report
Tradeweb Markets Inc. (TW) : Free Stock Analysis Report
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