AMP vs. PS: Which Stock Is the Better Value Option?
Investors interested in stocks from the Financial - Investment Management sector have probably already heard of Ameriprise Financial Services (AMP) and Pershing Square (PS). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.
Right now, Ameriprise Financial Services is sporting a Zacks Rank of #2 (Buy), while Pershing Square has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that AMP likely has seen a stronger improvement to its earnings outlook than PS has recently. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
AMP currently has a forward P/E ratio of 11.76, while PS has a forward P/E of 88.19. We also note that AMP has a PEG ratio of 0.98. 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. PS currently has a PEG ratio of 5.05.
Another notable valuation metric for AMP is its P/B ratio of 7.69. 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, PS has a P/B of 14.14.
These metrics, and several others, help AMP earn a Value grade of A, while PS has been given a Value grade of F.
AMP stands above PS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AMP is the superior value option right now.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>Ameriprise Financial, Inc. (AMP) : Free Stock Analysis Report
Pershing Square Inc. (PS) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
