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IVZ vs. TROW: Which Stock Is the Better Value Option?

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Investors interested in Financial - Investment Management stocks are likely familiar with Invesco (IVZ - Free Report) and T. Rowe Price (TROW - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Invesco and T. Rowe Price are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.

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.

IVZ currently has a forward P/E ratio of 9.73, while TROW has a forward P/E of 15.73. We also note that IVZ has a PEG ratio of 1.24. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TROW currently has a PEG ratio of 2.43.

Another notable valuation metric for IVZ is its P/B ratio of 0.66. 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 2.81.

These are just a few of the metrics contributing to IVZ's Value grade of A and TROW's Value grade of D.

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


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T. Rowe Price Group, Inc. (TROW) - free report >>

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