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ATCO or TROW: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Financial - Investment Management sector have probably already heard of Atlas and T. Rowe Price (TROW - Free Report) . 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.

Atlas and T. Rowe Price are both sporting a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. 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.

ATCO currently has a forward P/E ratio of 7.90, while TROW has a forward P/E of 16.20. We also note that ATCO has a PEG ratio of 0.48. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TROW currently has a PEG ratio of 2.07.

Another notable valuation metric for ATCO is its P/B ratio of 0.51. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, TROW has a P/B of 4.68.

These metrics, and several others, help ATCO earn a Value grade of A, while TROW has been given a Value grade of C.

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


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