ASGN vs. DT: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Computers - IT Services sector might want to consider either ASGN Inc (ASGN) or Dynatrace (DT). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 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.
ASGN Inc and Dynatrace are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that ASGN likely has seen a stronger improvement to its earnings outlook than DT has recently. However, value investors will care about much more than just this.
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.
ASGN currently has a forward P/E ratio of 15.77, while DT has a forward P/E of 92.44. We also note that ASGN has a PEG ratio of 2.73. 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. DT currently has a PEG ratio of 3.16.
Another notable valuation metric for ASGN is its P/B ratio of 2.52. 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, DT has a P/B of 12.43.
These are just a few of the metrics contributing to ASGN's Value grade of A and DT's Value grade of F.
ASGN stands above DT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ASGN is the superior value option right now.
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ASGN Incorporated (ASGN): Free Stock Analysis Report
Dynatrace, Inc. (DT): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.