INTR or BAM: Which Is the Better Value Stock Right Now?

Investors interested in Financial - Miscellaneous Services stocks are likely familiar with Inter & Co. Inc. (INTR) and Brookfield Asset Management (BAM). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Currently, Inter & Co. Inc. has a Zacks Rank of #2 (Buy), while Brookfield Asset Management 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 INTR has an improving earnings outlook. But this is only part of the picture for value investors.

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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

INTR currently has a forward P/E ratio of 6.79, while BAM has a forward P/E of 28.29. We also note that INTR has a PEG ratio of 0.21. 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. BAM currently has a PEG ratio of 2.06.

Another notable valuation metric for INTR is its P/B ratio of 1.13. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, BAM has a P/B of 9.32.

These metrics, and several others, help INTR earn a Value grade of A, while BAM has been given a Value grade of F.

INTR 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 INTR is likely the superior value option right now.

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

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