Yahoo Finance AMP vs. ARES: 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 Ares Management (ARES). 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 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.
Ameriprise Financial Services and Ares Management are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that AMP has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
AMP currently has a forward P/E ratio of 12.07, while ARES has a forward P/E of 28.82. We also note that AMP has a PEG ratio of 0.77. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ARES currently has a PEG ratio of 0.97.
Another notable valuation metric for AMP is its P/B ratio of 8.81. 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, ARES has a P/B of 9.11.
These metrics, and several others, help AMP earn a Value grade of B, while ARES has been given a Value grade of F.
AMP has seen stronger estimate revision activity and sports more attractive valuation metrics than ARES, so it seems like value investors will conclude that AMP is the superior option right now.
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Ameriprise Financial, Inc. (AMP) : Free Stock Analysis Report
Ares Management Corporation (ARES) : Free Stock Analysis Report
