Investors with an interest in Financial - Investment Management stocks have likely encountered both AllianceBernstein (AB) and BlackRock (BLK). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, both AllianceBernstein and BlackRock are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
AB currently has a forward P/E ratio of 11.29, while BLK has a forward P/E of 16.63. We also note that AB has a PEG ratio of 1.42. 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 1.52.
Another notable valuation metric for AB is its P/B ratio of 2.09. 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 2.51.
These metrics, and several others, help AB earn a Value grade of B, while BLK has been given a Value grade of C.
Both AB and BLK are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AB is 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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