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PFG or BLK: Which Is the Better Value Stock Right Now?

Zacks Equity Research
·2-min read

Investors with an interest in Financial - Investment Management stocks have likely encountered both Principal Financial (PFG) and BlackRock (BLK). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Principal Financial has a Zacks Rank of #2 (Buy), while BlackRock has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that PFG likely has seen a stronger improvement to its earnings outlook than BLK 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.

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Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

PFG currently has a forward P/E ratio of 11.70, while BLK has a forward P/E of 17.05. We also note that PFG has a PEG ratio of 1.97. 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 3.03.

Another notable valuation metric for PFG is its P/B ratio of 1.72. 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 2.32.

These are just a few of the metrics contributing to PFG's Value grade of A and BLK's Value grade of D.

PFG sticks out from BLK in both our Zacks Rank and Style Scores models, so value investors will likely feel that PFG is the better option right now.


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Principal Financial Group, Inc. (PFG) : Free Stock Analysis Report
 
BlackRock, Inc. (BLK) : Free Stock Analysis Report
 
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Zacks Investment Research