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LM or BX: 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 Legg Mason and Blackstone Group (BX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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.
Legg Mason has a Zacks Rank of #2 (Buy), while Blackstone Group has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that LM likely has seen a stronger improvement to its earnings outlook than BX has recently. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
LM currently has a forward P/E ratio of 18.81, while BX has a forward P/E of 29.06. We also note that LM has a PEG ratio of 1.65. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BX currently has a PEG ratio of 14.83.
Another notable valuation metric for LM is its P/B ratio of 1.15. 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, BX has a P/B of 3.48.
These metrics, and several others, help LM earn a Value grade of B, while BX has been given a Value grade of D.
LM has seen stronger estimate revision activity and sports more attractive valuation metrics than BX, so it seems like value investors will conclude that LM is the superior option right now.
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LM or BX: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Financial - Investment Management sector have probably already heard of Legg Mason and Blackstone Group (BX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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.
Legg Mason has a Zacks Rank of #2 (Buy), while Blackstone Group has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that LM likely has seen a stronger improvement to its earnings outlook than BX has recently. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
LM currently has a forward P/E ratio of 18.81, while BX has a forward P/E of 29.06. We also note that LM has a PEG ratio of 1.65. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BX currently has a PEG ratio of 14.83.
Another notable valuation metric for LM is its P/B ratio of 1.15. 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, BX has a P/B of 3.48.
These metrics, and several others, help LM earn a Value grade of B, while BX has been given a Value grade of D.
LM has seen stronger estimate revision activity and sports more attractive valuation metrics than BX, so it seems like value investors will conclude that LM is the superior option right now.