AB vs. BLK: Which Stock Is the Better Value Option?
Investors interested in Financial - Investment Management stocks are likely familiar with AllianceBernstein (AB) and BlackRock (BLK). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, AllianceBernstein is sporting a Zacks Rank of #2 (Buy), while BlackRock has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that AB has an improving earnings outlook. However, value investors will care about much more than just this.
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 11.62, while BLK has a forward P/E of 21.43. We also note that AB has a PEG ratio of 0.74. 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 1.94.
Another notable valuation metric for AB is its P/B ratio of 1.91. 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, BLK has a P/B of 3.26.
These metrics, and several others, help AB earn a Value grade of A, while BLK has been given a Value grade of D.
AB 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 AB is likely 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