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AMG vs. TROW: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Financial - Investment Management sector might want to consider either Affiliated Managers Group (AMG) or T. Rowe Price (TROW). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Affiliated Managers Group is sporting a Zacks Rank of #2 (Buy), while T. Rowe Price has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that AMG likely has seen a stronger improvement to its earnings outlook than TROW has recently. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

AMG currently has a forward P/E ratio of 9.36, while TROW has a forward P/E of 15.85. We also note that AMG has a PEG ratio of 0.62. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TROW currently has a PEG ratio of 1.76.

Another notable valuation metric for AMG 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, TROW has a P/B of 5.87.

These metrics, and several others, help AMG earn a Value grade of A, while TROW has been given a Value grade of C.

AMG stands above TROW thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AMG is the superior value option right now.


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Affiliated Managers Group, Inc. (AMG) : Free Stock Analysis Report
 
T. Rowe Price Group, Inc. (TROW) : Free Stock Analysis Report
 
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