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FUTU vs. TRI: Which Stock Is the Better Value Option?

Zacks Equity Research
·2 min read

Investors interested in Technology Services stocks are likely familiar with Futu Holdings Limited Sponsored ADR (FUTU) and Thomson Reuters (TRI). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Futu Holdings Limited Sponsored ADR has a Zacks Rank of #2 (Buy), while Thomson Reuters has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that FUTU likely has seen a stronger improvement to its earnings outlook than TRI has recently. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

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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.

FUTU currently has a forward P/E ratio of 15.69, while TRI has a forward P/E of 41.14. We also note that FUTU has a PEG ratio of 0.87. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TRI currently has a PEG ratio of 3.56.

Another notable valuation metric for FUTU is its P/B ratio of 2.13. 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, TRI has a P/B of 3.71.

These are just a few of the metrics contributing to FUTU's Value grade of B and TRI's Value grade of D.

FUTU has seen stronger estimate revision activity and sports more attractive valuation metrics than TRI, so it seems like value investors will conclude that FUTU is the superior option right now.


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Thomson Reuters Corp (TRI) : Free Stock Analysis Report
 
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Zacks Investment Research