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BEN vs. BLK: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
·2 min read

Investors with an interest in Financial - Investment Management stocks have likely encountered both Franklin Resources (BEN) and BlackRock (BLK). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, both Franklin Resources and BlackRock are sporting a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

BEN currently has a forward P/E ratio of 8.91, while BLK has a forward P/E of 21.89. We also note that BEN has a PEG ratio of 1.57. 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. BLK currently has a PEG ratio of 2.39.

Another notable valuation metric for BEN is its P/B ratio of 1.12. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, BLK has a P/B of 3.17.

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

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


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Franklin Resources, Inc. (BEN) : Free Stock Analysis Report
 
BlackRock, Inc. (BLK) : Free Stock Analysis Report
 
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