IVZ or APO: Which Is the Better Value Stock Right Now?

Investors interested in Financial - Investment Management stocks are likely familiar with Invesco (IVZ) and Apollo Global Management Inc. (APO). 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.

Invesco has a Zacks Rank of #2 (Buy), while Apollo Global Management Inc. 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 IVZ 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 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.

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.

IVZ currently has a forward P/E ratio of 12.79, while APO has a forward P/E of 16.43. We also note that IVZ has a PEG ratio of 0.84. 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. APO currently has a PEG ratio of 1.34.

Another notable valuation metric for IVZ is its P/B ratio of 0.92. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, APO has a P/B of 2.23.

These are just a few of the metrics contributing to IVZ's Value grade of A and APO's Value grade of C.

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

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This article originally published on Zacks Investment Research (zacks.com).

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