Investors interested in Financial - Investment Management stocks are likely familiar with Ares Management (ARES) and Hargreaves Lansdown plc (HRGLY). 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, Ares Management is sporting a Zacks Rank of #1 (Strong Buy), while Hargreaves Lansdown plc has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ARES has an improving earnings outlook. But this is just one factor that value investors are interested in.
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 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.
ARES currently has a forward P/E ratio of 14.71, while HRGLY has a forward P/E of 33.16. We also note that ARES has a PEG ratio of 1.51. 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. HRGLY currently has a PEG ratio of 2.72.
Another notable valuation metric for ARES is its P/B ratio of 1.94. 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, HRGLY has a P/B of 19.45.
These metrics, and several others, help ARES earn a Value grade of A, while HRGLY has been given a Value grade of F.
ARES sticks out from HRGLY in both our Zacks Rank and Style Scores models, so value investors will likely feel that ARES is the better option right now.
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Ares Management L.P. (ARES) : Free Stock Analysis Report
Hargreaves Lansdown plc (HRGLY) : Free Stock Analysis Report
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