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

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Zacks Equity Research
·2 min read
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Investors with an interest in Financial - Investment Management stocks have likely encountered both AllianceBernstein (AB) and BlackRock (BLK). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

AllianceBernstein and BlackRock are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that AB 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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

AB currently has a forward P/E ratio of 10.86, while BLK has a forward P/E of 19.67. We also note that AB has a PEG ratio of 1.62. 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. BLK currently has a PEG ratio of 1.97.

Another notable valuation metric for AB is its P/B ratio of 1.84. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, BLK has a P/B of 2.69.

These metrics, and several others, help AB earn a Value grade of B, while BLK has been given a Value grade of D.

AB 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 AB is likely the superior value option right now.


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AllianceBernstein Holding L.P. (AB) : Free Stock Analysis Report
 
BlackRock, Inc. (BLK) : Free Stock Analysis Report
 
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Zacks Investment Research