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ATCO vs. BX: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Financial - Investment Management sector might want to consider either Atlas or Blackstone Group (BX - Free Report) . 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Atlas is sporting a Zacks Rank of #2 (Buy), while Blackstone Group has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that ATCO likely has seen a stronger improvement to its earnings outlook than BX has recently. But this is just one factor that value investors are interested in.

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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

ATCO currently has a forward P/E ratio of 10.75, while BX has a forward P/E of 23.90. We also note that ATCO has a PEG ratio of 0.65. 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. BX currently has a PEG ratio of 1.64.

Another notable valuation metric for ATCO is its P/B ratio of 0.96. 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, BX has a P/B of 3.53.

These metrics, and several others, help ATCO earn a Value grade of A, while BX has been given a Value grade of D.

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


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