NMR Vs. MS: Which Stock Is The Better Value Option?

By Zacks Investment ResearchStock MarketsMar 11, 2020 11:40PM ET

www.investing.com/analysis/nmr-vs-ms-which-stock-is-the-better-value-option-200515540

NMR Vs. MS: Which Stock Is The Better Value Option?

By Zacks Investment Research | Mar 11, 2020 11:40PM ET

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Investors interested in Financial - Investment Bank stocks are likely familiar with Nomura Holdings (NMR) and Morgan Stanley (NYSE:MS). 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.

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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, both Nomura Holdings and Morgan Stanley are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.

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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

NMR currently has a forward P/E ratio of 4.79, while MS has a forward P/E of 6.94. We also note that NMR has a PEG ratio of 0.09. 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. MS currently has a PEG ratio of 0.71.

Another notable valuation metric for NMR is its P/B ratio of 0.48. 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, MS has a P/B of 0.80.

These metrics, and several others, help NMR earn a Value grade of A, while MS has been given a Value grade of D.

Both NMR and MS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that NMR is the superior value option right now.

Nomura Holdings Inc ADR (NMR): Free Stock Analysis Report

Morgan Stanley (MS): Free Stock Analysis Report

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NMR Vs. MS: Which Stock Is The Better Value Option?

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