AB or BLK: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Financial - Investment Management sector have probably already heard of AllianceBernstein (AB) 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.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, AllianceBernstein has a Zacks Rank of #2 (Buy), while BlackRock has a Zacks Rank of #3 (Hold). This means that AB's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
AB currently has a forward P/E ratio of 11.71, while BLK has a forward P/E of 22.95. We also note that AB has a PEG ratio of 0.74. 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 2.07.
Another notable valuation metric for AB is its P/B ratio of 1.92. 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 3.50.
These metrics, and several others, help AB earn a Value grade of B, while BLK has been given a Value grade of D.
AB stands above BLK thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AB is the superior value option right now.
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AllianceBernstein Holding L.P. (AB) : Free Stock Analysis Report
BlackRock, Inc. (BLK) : Free Stock Analysis Report