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AMG or BLK: Which Is the Better Value Stock Right Now?

Zacks Equity Research
·2-min read

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 is more attractive to value investors? We'll need to take a closer look to find out.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Affiliated Managers Group has a Zacks Rank of #2 (Buy), while BlackRock has a Zacks Rank of #3 (Hold). This means that AMG's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

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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 9.80, while BLK has a forward P/E of 24.51. We also note that AMG has a PEG ratio of 0.65. 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 2.45.

Another notable valuation metric for AMG is its P/B ratio of 2.20. 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 3.95.

These metrics, and several others, help AMG earn a Value grade of A, while BLK has been given 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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Affiliated Managers Group, Inc. (AMG) : Free Stock Analysis Report
 
BlackRock, Inc. (BLK) : Free Stock Analysis Report
 
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