Investors with an interest in Financial - Investment Management stocks have likely encountered both AllianceBernstein (AB - Free Report) and Hamilton Lane (HLNE - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 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.
Currently, AllianceBernstein has a Zacks Rank of #2 (Buy), while Hamilton Lane has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that AB likely has seen a stronger improvement to its earnings outlook than HLNE has recently. 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 12.73, while HLNE has a forward P/E of 30.68. We also note that AB has a PEG ratio of 1.87. 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. HLNE currently has a PEG ratio of 2.05.
Another notable valuation metric for AB is its P/B ratio of 1.99. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, HLNE has a P/B of 15.19.
Based on these metrics and many more, AB holds a Value grade of A, while HLNE has a Value grade of D.
AB has seen stronger estimate revision activity and sports more attractive valuation metrics than HLNE, so it seems like value investors will conclude that AB is the superior option right now.