ATCO or CSWC: Which Is the Better Value Stock Right Now?
ATCO vs. CSWC: Which Stock Is the Better Value Option?
Investors with an interest in Financial - Investment Management stocks have likely encountered both Atlas (ATCO) and Capital Southwest (CSWC). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Atlas has a Zacks Rank of #1 (Strong Buy), while Capital Southwest has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ATCO has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
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.
ATCO currently has a forward P/E ratio of 8.11, while CSWC has a forward P/E of 13.82. We also note that ATCO has a PEG ratio of 0.29. 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. CSWC currently has a PEG ratio of 13.82.
Another notable valuation metric for ATCO is its P/B ratio of 1.01. 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, CSWC has a P/B of 1.53.
These metrics, and several others, help ATCO earn a Value grade of A, while CSWC has been given a Value grade of D.
ATCO has seen stronger estimate revision activity and sports more attractive valuation metrics than CSWC, so it seems like value investors will conclude that ATCO is the superior option right now.
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Atlas Corp. (ATCO): Free Stock Analysis Report
Capital Southwest Corporation (CSWC): Free Stock Analysis Report
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