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JHG or KKR: 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 Janus Henderson Group plc (JHG - Free Report) and KKR & Co. Inc. (KKR - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Janus Henderson Group plc has a Zacks Rank of #2 (Buy), while KKR & Co. Inc. has a Zacks Rank of #3 (Hold) right now. This means that JHG's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

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.

JHG currently has a forward P/E ratio of 11.84, while KKR has a forward P/E of 27.73. We also note that JHG has a PEG ratio of 0.85. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. KKR currently has a PEG ratio of 1.35.

Another notable valuation metric for JHG is its P/B ratio of 1.44. 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, KKR has a P/B of 1.79.

These are just a few of the metrics contributing to JHG's Value grade of B and KKR's Value grade of D.

JHG is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that JHG is likely the superior value option right now.


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