AMG vs. BLK: Which Stock Is the Better Value Option?

Investors interested in Financial - Investment Management stocks are likely familiar with Affiliated Managers Group (AMG) and BlackRock (BLK). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Affiliated Managers Group is sporting a Zacks Rank of #2 (Buy), while BlackRock 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 BLK 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.

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.

AMG currently has a forward P/E ratio of 9.17, while BLK has a forward P/E of 23.77. We also note that AMG has a PEG ratio of 0.61. 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. BLK currently has a PEG ratio of 2.16.

Another notable valuation metric for AMG is its P/B ratio of 2.13. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, BLK has a P/B of 3.81.

Based on these metrics and many more, AMG holds a Value grade of A, while BLK has a Value grade of D.

AMG is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that AMG is likely the superior value option right now.

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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.