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BEN vs. APO: Which Stock Is the Better Value Option?

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Zacks Equity Research
·2 min read
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Investors interested in Financial - Investment Management stocks are likely familiar with Franklin Resources (BEN) and Apollo Global Management, Inc. (APO). But which of these two stocks presents investors with the better value opportunity right now? Let's 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.

Currently, Franklin Resources has a Zacks Rank of #2 (Buy), while Apollo Global Management, Inc. has a Zacks Rank of #3 (Hold). This means that BEN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

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.

BEN currently has a forward P/E ratio of 9.02, while APO has a forward P/E of 18.77. We also note that BEN has a PEG ratio of 1.42. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. APO currently has a PEG ratio of 5.29.

Another notable valuation metric for BEN is its P/B ratio of 1.22. 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, APO has a P/B of 3.03.

These metrics, and several others, help BEN earn a Value grade of B, while APO has been given a Value grade of C.

BEN is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that BEN is likely the superior value option right now.


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Franklin Resources, Inc. (BEN) : Free Stock Analysis Report
 
Apollo Global Management, Inc. (APO) : Free Stock Analysis Report
 
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Zacks Investment Research