Yahoo Finance AMP or ARES: Which Is the Better Value Stock Right Now?
Investors with an interest in Financial - Investment Management stocks have likely encountered both Ameriprise Financial Services (AMP) and Ares Management (ARES). But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Ameriprise Financial Services is sporting a Zacks Rank of #2 (Buy), while Ares Management 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 ARES has recently. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
AMP currently has a forward P/E ratio of 12.60, while ARES has a forward P/E of 31.52. We also note that AMP has a PEG ratio of 0.75. 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. ARES currently has a PEG ratio of 1.28.
Another notable valuation metric for AMP is its P/B ratio of 8.96. 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, ARES has a P/B of 9.26.
Based on these metrics and many more, AMP holds a Value grade of B, while ARES has a Value grade of F.
AMP sticks out from ARES in both our Zacks Rank and Style Scores models, so value investors will likely feel that AMP is the better option right now.
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Ameriprise Financial, Inc. (AMP) : Free Stock Analysis Report
Ares Management Corporation (ARES) : Free Stock Analysis Report
