AMG or EV: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Financial - Investment Management sector have probably already heard of Affiliated Managers Group (AMG) and Eaton Vance (EV). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Affiliated Managers Group has a Zacks Rank of #2 (Buy), while Eaton Vance has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that AMG likely has seen a stronger improvement to its earnings outlook than EV has recently. But this is just one factor that value investors are interested in.
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.
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.
AMG currently has a forward P/E ratio of 7.97, while EV has a forward P/E of 13.26. We also note that AMG has a PEG ratio of 0.71. 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. EV currently has a PEG ratio of 1.73.
Another notable valuation metric for AMG is its P/B ratio of 1.44. 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, EV has a P/B of 4.55.
These are just a few of the metrics contributing to AMG's Value grade of A and EV's Value grade of C.
AMG sticks out from EV in both our Zacks Rank and Style Scores models, so value investors will likely feel that AMG is the better option right now.
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Affiliated Managers Group, Inc. (AMG): Free Stock Analysis Report
Eaton Vance Corporation (EV): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.