Investors with an interest in Financial - Investment Management stocks have likely encountered both Invesco (IVZ) and ASHMORE GROUP (AJMPF). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Both Invesco and ASHMORE GROUP have a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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.
IVZ currently has a forward P/E ratio of 6.88, while AJMPF has a forward P/E of 18.80. We also note that IVZ has a PEG ratio of 0.83. 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. AJMPF currently has a PEG ratio of 1.72.
Another notable valuation metric for IVZ is its P/B ratio of 0.82. 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, AJMPF has a P/B of 4.36.
These metrics, and several others, help IVZ earn a Value grade of A, while AJMPF has been given a Value grade of C.
Both IVZ and AJMPF are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that IVZ is the superior value option right now.
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Invesco Ltd. (IVZ): Free Stock Analysis Report
ASHMORE GROUP (AJMPF): 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.