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

Zacks Equity Research
·2 min read

Investors with an interest in Financial - Investment Management stocks have likely encountered both Affiliated Managers Group (AMG) and Virtus Investment Partners (VRTS). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, both Affiliated Managers Group and Virtus Investment Partners are sporting 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 factor that value investors are interested in.

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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

AMG currently has a forward P/E ratio of 6.35, while VRTS has a forward P/E of 8.85. We also note that AMG has a PEG ratio of 0.53. 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. VRTS currently has a PEG ratio of 0.97.

Another notable valuation metric for AMG is its P/B ratio of 1. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, VRTS has a P/B of 1.34.

These are just a few of the metrics contributing to AMG's Value grade of B and VRTS's Value grade of D.

Both AMG and VRTS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AMG is the superior value option right now.


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Affiliated Managers Group, Inc. (AMG) : Free Stock Analysis Report
 
Virtus Investment Partners, Inc. (VRTS) : Free Stock Analysis Report
 
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Zacks Investment Research