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AB vs. APO: Which Stock Should Value Investors Buy Now?

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Investors interested in Financial - Investment Management stocks are likely familiar with AllianceBernstein (AB - Free Report) and Apollo Global Management Inc. (APO - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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.

Right now, AllianceBernstein is sporting a Zacks Rank of #2 (Buy), while Apollo Global Management Inc. 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 try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

AB currently has a forward P/E ratio of 11.49, while APO has a forward P/E of 14.83. We also note that AB has a PEG ratio of 0.67. 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. APO currently has a PEG ratio of 0.94.

Another notable valuation metric for AB is its P/B ratio of 1.93. 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, APO has a P/B of 2.76.

These metrics, and several others, help AB earn a Value grade of B, while APO has been given a Value grade of C.

AB sticks out from APO in both our Zacks Rank and Style Scores models, so value investors will likely feel that AB is the better option right now.


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AllianceBernstein Holding L.P. (AB) - free report >>

Apollo Global Management Inc. (APO) - free report >>

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