FUTU vs BAM: A Valuation Comparison for Discerning Investors

When evaluating Financial Services stocks, Futu Holdings Limited Sponsored ADR (FUTU) and Brookfield Asset Management (BAM) emerge as two compelling candidates. Yet their value propositions diverge significantly based on quantitative analysis. Let’s examine what the numbers reveal.

The Ranking Advantage

The Zacks methodology combines earnings estimate revisions with fundamental analysis through the Style Scores system to identify genuine opportunities. Under this framework, FUTU currently holds a #2 (Buy) designation, while BAM carries a #3 (Hold) rating. This distinction matters: FUTU’s stronger ranking suggests more favorable recent earnings forecast adjustments compared to BAM.

The Valuation Metrics Tell a Clear Story

However, rankings alone don’t drive value investing decisions. Let’s explore the traditional metrics that serious investors scrutinize:

Price-to-Earnings and Growth Ratios: FUTU trades at a forward P/E of 16.99, substantially below BAM’s 33.50. The gap widens dramatically when incorporating growth expectations. FUTU’s PEG ratio stands at 0.53, indicating the stock is pricing in less value relative to its growth trajectory. BAM’s PEG of 2.18 suggests a premium valuation by comparison.

Book Value Assessment: The P/B ratio measures market price against tangible assets. FUTU carries a P/B of 4.76, while BAM’s reaches 9.56. This means BAM commands nearly double the multiple on its balance sheet equity—a significant valuation premium that warrants scrutiny.

The Grade Differential

When Style Scores synthesize these metrics alongside cash flow per share, earnings yield, and P/S ratios, the verdict emerges clearly. FUTU receives a Value grade of B, reflecting an undervalued profile. BAM earns only a D rating, positioning it as relatively expensive at current levels.

The Verdict

Based on this valuation architecture, FUTU presents the more attractive value prospect. Its lower multiples across P/E, PEG, and P/B categories, combined with superior earnings momentum reflected in its Zacks Rank, suggest better upside potential for value-oriented investors seeking both quality and reasonable pricing.

Data sourced from Zacks Investment Research analysis. Past performance and ratings do not guarantee future results.