BEN or BLK: Which Is the Better Value Stock Right Now?
Investors interested in Financial - Investment Management stocks are likely familiar with Franklin ResourcesBEN-- (BEN) and BlackRockBLK-- (BLK). But which of these two companies is the best option for those looking for undervalued stocks? 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.
Currently, Franklin Resources has a Zacks Rank of #2 (Buy), while BlackRock has a Zacks Rank of #3 (Hold). This means that BEN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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 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.
BEN currently has a forward P/E ratio of 9.14, while BLKBLK-- has a forward P/E of 17.93. We also note that BENBEN-- has a PEG ratio of 0.75. 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. BLK currently has a PEG ratio of 1.23.
Another notable valuation metric for BEN is its P/B ratio of 0.94. 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 2.66.
These metrics, and several others, help BEN earn a Value grade of B, while BLK has been given a Value grade of D.
BEN sticks out from BLK in both our Zacks Rank and Style Scores models, so value investors will likely feel that BEN is the better option right now.
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Franklin Resources, Inc. (BEN): Free Stock Analysis Report
BlackRock (BLK): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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