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AB or BLK: Which Is the Better Value Stock Right Now?

AB or BLK: Which Is the Better Value Stock Right Now?

Yahoo2 days ago
Investors interested in Financial - Investment Management stocks are likely familiar with AllianceBernstein (AB) and BlackRock (BLK). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
AllianceBernstein and BlackRock are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that AB is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
AB currently has a forward P/E ratio of 12.07, while BLK has a forward P/E of 24.49. We also note that AB has a PEG ratio of 1.52. 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. BLK currently has a PEG ratio of 2.33.
Another notable valuation metric for AB is its P/B ratio of 2.24. 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, BLK has a P/B of 3.64.
These are just a few of the metrics contributing to AB's Value grade of B and BLK's Value grade of F.
AB has seen stronger estimate revision activity and sports more attractive valuation metrics than BLK, so it seems like value investors will conclude that AB is the superior option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
AllianceBernstein Holding L.P. (AB) : Free Stock Analysis Report
BlackRock (BLK) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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