Investors looking for stocks in the Financial - Investment Management sector might want to consider either Franklin Resources (BEN) or Oaktree Capital Group, LLC (OAK). 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.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Both Franklin Resources and Oaktree Capital Group, LLC have a Zacks Rank of # 1 (Strong Buy) right now. 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 factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
BEN currently has a forward P/E ratio of 13.74, while OAK has a forward P/E of 14.37. We also note that BEN has a PEG ratio of 1.96. 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. OAK currently has a PEG ratio of 2.24.
Another notable valuation metric for BEN is its P/B ratio of 1.72. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, OAK has a P/B of 3.81.
These are just a few of the metrics contributing to BEN's Value grade of A and OAK's Value grade of C.
Both BEN and OAK 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
Oaktree Capital Group, LLC (OAK) : Free Stock Analysis Report
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