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AMP vs. ARES: Which Stock Should Value Investors Buy Now?

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Investors interested in Financial - Investment Management stocks are likely familiar with Ameriprise Financial Services (AMP - Free Report) and Ares Management (ARES - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks 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). 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. But this is just one factor that value investors are interested in.

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 13.59, while ARES has a forward P/E of 37.64. We also note that AMP has a PEG ratio of 0.82. 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 1.47.

Another notable valuation metric for AMP is its P/B ratio of 9.30. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ARES has a P/B of 9.40.

These metrics, and several others, help AMP earn a Value grade of B, while ARES has been given a Value grade of F.

AMP stands above ARES thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AMP is the superior value option right now.


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Ameriprise Financial, Inc. (AMP) - free report >>

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