PAX or CG: Which Is the Better Value Stock Right Now?

Investors with an interest in Financial - Investment Management stocks have likely encountered both Patria Investments (PAX) and Carlyle Group (CG). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Patria Investments and Carlyle Group are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PAX is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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 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.

PAX currently has a forward P/E ratio of 7.31, while CG has a forward P/E of 9.87. We also note that PAX has a PEG ratio of 0.46. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CG currently has a PEG ratio of 0.88.

Another notable valuation metric for PAX is its P/B ratio of 1.21. 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 2.33.

Based on these metrics and many more, PAX holds a Value grade of A, while CG has a Value grade of C.

PAX 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 PAX is likely the superior value option right now.

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Patria Investments Limited (PAX): Free Stock Analysis Report

Carlyle Group Inc. (CG): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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