AMG vs. BLK: Which Stock Is the Better Value Option?
Investors interested in stocks from the Financial - Investment Management sector have probably already heard of Affiliated Managers Group (AMG) and BlackRock (BLK). But which of these two stocks presents investors with the better value opportunity right now? 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, Affiliated Managers Group has a Zacks Rank of #2 (Buy), while BlackRock has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that AMG likely has seen a stronger improvement to its earnings outlook than BLK has recently. But this is just one factor that value investors are interested in.
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.
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.
AMG currently has a forward P/E ratio of 10.36, while BLK has a forward P/E of 19.09. We also note that AMG has a PEG ratio of 0.52. 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. BLK currently has a PEG ratio of 1.18.
Another notable valuation metric for AMG is its P/B ratio of 2.56. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, BLK has a P/B of 2.86.
Based on these metrics and many more, AMG holds a Value grade of B, while BLK has a Value grade of D.
AMG sticks out from BLK in both our Zacks Rank and Style Scores models, so value investors will likely feel that AMG is the better option right now.
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This article originally published on Zacks Investment Research (zacks.com).
