Yahoo Finance AXP vs. BAM: Which Stock Is the Better Value Option?
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 companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, American Express is sporting a Zacks Rank of #2 (Buy), while Brookfield Asset 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 AXP has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
AXP currently has a forward P/E ratio of 17.74, while BAM has a forward P/E of 26.89. We also note that AXP has a PEG ratio of 1.28. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BAM currently has a PEG ratio of 1.52.
Another notable valuation metric for AXP is its P/B ratio of 5.87. 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, BAM has a P/B of 7.86.
These metrics, and several others, help AXP earn a Value grade of B, while BAM has been given a Value grade of D.
AXP sticks out from BAM in both our Zacks Rank and Style Scores models, so value investors will likely feel that AXP is the better option right now.
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American Express Company (AXP) : Free Stock Analysis Report
Brookfield Asset Management Ltd. (BAM) : Free Stock Analysis Report
