Which one is more expensive to buy fundamentally, PGOLD or RRHI if based on their June 2017 quarterly report?

RRHI and PGOLD are PSE companies under the servicing sector. No doubt that RRHI market price is higher than PGOLD which would give an initial impression that the latter is more expensive to buy than PGOLD but, it's not always the case, one would need to compare their financial statement to know. First, let's compare RRHI price to book value to PGOLD price to book value.

RRHI June 2017 Quarterly Report

PGOLD June 2017 Quarterly Report

As of Sept 14, 2017, PGOLD was last traded price at 51.65Php, this is 3.1 times higher compared to their recorded book value, meaning, the company is perceived to be worth 3.1 times higher than what the company is really worth as according to their June 2017 quarterly report. On the other hand, RRHI on the same trading day was last traded price at 95.95Php, this is 2.7 times higher compared to their recorded book value last June 2017 quarterly report. In terms of Price to book value, it would appear that RRHI is more fundamentally cheaper to buy than PGOLD.

In terms of P/E, PGOLD trailing P/E would be 25.8 meaning, for every 1Php income last 2016, investors of this company are willing to pay 25.8Php. On the other hand, RRHI on the same trading day has a P/E value of 27.4. It may seem like in terms of P/E, RRHI is a bit more expensive than PGOLD. But, if we look at the PEG ratio, PGOLD growth rate from 2015 to 2016 was 10.5% which would give a PEG ratio of 2.46 while RRHI growth rate from the same period was 11.5% which would give a PEG ratio of 2.39.

Now it is said that a PEG ratio of above 1 is considered overvalue and vice versa nonetheless, both companies may have a PEG ratio of above 1 but in between the two, RRHI seems like cheaper to buy compared to PGOLD considering their growth rate from 2015 to 2016.

Disclaimer: Trade or invest at your own risk.

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