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ATCO vs. BLK: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Financial - Investment Management sector might want to consider either Atlas or BlackRock (BLK - Free Report) . 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Atlas has a Zacks Rank of #1 (Strong Buy), while BlackRock has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ATCO is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

ATCO currently has a forward P/E ratio of 9.55, while BLK has a forward P/E of 20.62. We also note that ATCO has a PEG ratio of 2.39. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BLK currently has a PEG ratio of 3.67.

Another notable valuation metric for ATCO is its P/B ratio of 0.94. 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, BLK has a P/B of 2.84.

Based on these metrics and many more, ATCO holds a Value grade of B, while BLK has a Value grade of D.

ATCO has seen stronger estimate revision activity and sports more attractive valuation metrics than BLK, so it seems like value investors will conclude that ATCO is the superior option right now.


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