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AMG or CG: 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 Affiliated Managers Group (AMG - Free Report) and Carlyle Group (CG - 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.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Affiliated Managers Group has a Zacks Rank of #1 (Strong Buy), while Carlyle Group has a Zacks Rank of #3 (Hold) right now. This means that AMG's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

AMG currently has a forward P/E ratio of 9.65, while CG has a forward P/E of 15.50. We also note that AMG has a PEG ratio of 0.61. 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. CG currently has a PEG ratio of 1.16.

Another notable valuation metric for AMG is its P/B ratio of 1.59. 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, CG has a P/B of 3.42.

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

AMG stands above CG thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AMG is the superior value option right now.


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