Back to top

Image: Bigstock

JHG vs. CG: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors with an interest in Financial - Investment Management stocks have likely encountered both Janus Henderson Group plc (JHG - Free Report) and Carlyle Group (CG - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, Janus Henderson Group plc has a Zacks Rank of #1 (Strong Buy), while Carlyle Group has a Zacks Rank of #3 (Hold). This means that JHG's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

JHG currently has a forward P/E ratio of 12.94, while CG has a forward P/E of 13.49. We also note that JHG has a PEG ratio of 0.58. 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. CG currently has a PEG ratio of 1.34.

Another notable valuation metric for JHG is its P/B ratio of 1.52. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, CG has a P/B of 2.86.

These metrics, and several others, help JHG earn a Value grade of B, while CG has been given a Value grade of D.

JHG 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 JHG is likely the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Carlyle Group Inc. (CG) - free report >>

Janus Henderson Group plc (JHG) - free report >>

Published in