Investors interested in Financial - Investment Management stocks are likely familiar with AllianceBernstein (AB - Free Report) and SEI Investments (SEIC - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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, both AllianceBernstein and SEI Investments are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
AB currently has a forward P/E ratio of 11.21, while SEIC has a forward P/E of 20.33. We also note that AB has a PEG ratio of 1.58. 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. SEIC currently has a PEG ratio of 1.69.
Another notable valuation metric for AB is its P/B ratio of 1.82. 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, SEIC has a P/B of 6.26.
These are just a few of the metrics contributing to AB's Value grade of A and SEIC's Value grade of D.
Both AB and SEIC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AB is the superior value option right now.