Investors with an interest in Financial - Investment Management stocks have likely encountered both T. Rowe Price (TROW) and Ares Management (ARES). 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.

T. Rowe Price and Ares Management are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that TROW likely has seen a stronger improvement to its earnings outlook than ARES has recently. But this is just one piece of the puzzle for value investors.

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.

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.

TROW currently has a forward P/E ratio of 13.17, while ARES has a forward P/E of 42.85. We also note that TROW has a PEG ratio of 1.74. 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. ARES currently has a PEG ratio of 1.89.

Another notable valuation metric for TROW is its P/B ratio of 2.63. 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, ARES has a P/B of 10.25.

These are just a few of the metrics contributing to TROW's Value grade of B and ARES's Value grade of D.

TROW is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that TROW is likely the superior value option right now.

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T. Rowe Price Group, Inc. (TROW) : Free Stock Analysis Report

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