BCKIY or STRL: Which Is the Better Value Stock Right Now?
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Babcock International Group PLC has a Zacks Rank of #2 (Buy), while Sterling Infrastructure 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 BCKIY has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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.
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.
BCKIY currently has a forward P/E ratio of 17.68, while STRL has a forward P/E of 30.57. We also note that BCKIY has a PEG ratio of 0.63. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. STRL currently has a PEG ratio of 2.04.
Another notable valuation metric for BCKIY is its P/B ratio of 8.53. 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, STRL has a P/B of 9.68.
These metrics, and several others, help BCKIY earn a Value grade of B, while STRL has been given a Value grade of D.
BCKIY has seen stronger estimate revision activity and sports more attractive valuation metrics than STRL, so it seems like value investors will conclude that BCKIY is the superior option right now.
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Babcock International Group PLC (BCKIY) : Free Stock Analysis Report
Sterling Infrastructure, Inc. (STRL) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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