Investors with an interest in Financial - Investment Management stocks have likely encountered both AllianceBernstein (AB) and Cohen & Steers Inc (CNS). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, both AllianceBernstein and Cohen & Steers Inc are holding a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one piece of the puzzle 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 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 12.21, while CNS has a forward P/E of 20.31. We also note that AB has a PEG ratio of 1.27. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CNS currently has a PEG ratio of 1.63.
Another notable valuation metric for AB is its P/B ratio of 3.18. 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, CNS has a P/B of 5.67.
These are just a few of the metrics contributing to AB's Value grade of A and CNS's Value grade of D.
Both AB and CNS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AB is the superior value option right now.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
