Yahoo Finance AXP or BAM: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either American Express (AXP) or Brookfield Asset Management (BAM). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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.
American Express and Brookfield Asset Management are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that AXP is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
AXP currently has a forward P/E ratio of 18.28, while BAM has a forward P/E of 26.68. We also note that AXP has a PEG ratio of 1.35. 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. BAM currently has a PEG ratio of 1.53.
Another notable valuation metric for AXP is its P/B ratio of 5.89. 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, BAM has a P/B of 7.43.
These metrics, and several others, help AXP earn a Value grade of B, while BAM has been given a Value grade of D.
AXP stands above BAM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AXP is the superior value option right now.
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American Express Company (AXP) : Free Stock Analysis Report
Brookfield Asset Management Ltd. (BAM) : Free Stock Analysis Report
