AMG vs. BLK: Which Stock Is the Better Value Option?
Investors with an interest in Financial - Investment Management stocks have likely encountered both Affiliated Managers Group (AMG) and BlackRock (BLK). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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.
Right now, Affiliated Managers Group is sporting a Zacks Rank of #2 (Buy), while BlackRock has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that AMG has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
AMG currently has a forward P/E ratio of 8.44, while BLK has a forward P/E of 21.16. We also note that AMG has a PEG ratio of 0.77. 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 2.20.
Another notable valuation metric for AMG is its P/B ratio of 1.38. 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, BLK has a P/B of 2.93.
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
