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

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Investors looking for stocks in the Financial - Investment Management sector might want to consider either AllianceBernstein (AB - 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.

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.

AllianceBernstein and BlackRock are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. 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. But this is only part of the picture for value investors.

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.

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.

AB currently has a forward P/E ratio of 11.96, while BLK has a forward P/E of 23.77. We also note that AB has a PEG ratio of 1.50. 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 2.16.

Another notable valuation metric for AB is its P/B ratio of 2.22. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, BLK has a P/B of 3.55.

These are just a few of the metrics contributing to AB's Value grade of B and BLK's Value grade of F.

AB sticks out from BLK 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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