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JHG vs. BLK: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Financial - Investment Management sector might want to consider either Janus Henderson Group plc (JHG - Free Report) or BlackRock (BLK - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Janus Henderson Group plc has a Zacks Rank of #2 (Buy), while BlackRock has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that JHG has an improving earnings outlook. However, value investors will care about much more than just this.

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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

JHG currently has a forward P/E ratio of 9.26, while BLK has a forward P/E of 22.09. We also note that JHG has a PEG ratio of 1.06. 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 2.01.

Another notable valuation metric for JHG is its P/B ratio of 1.24. 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, BLK has a P/B of 3.49.

These metrics, and several others, help JHG earn a Value grade of A, while BLK has been given a Value grade of D.

JHG has seen stronger estimate revision activity and sports more attractive valuation metrics than BLK, so it seems like value investors will conclude that JHG is the superior option right now.


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