Investors with an interest in Consulting Services stocks have likely encountered both Booz Allen Hamilton (BAH) and Gartner (IT). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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.
Booz Allen Hamilton and Gartner are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BAH is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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.
BAH currently has a forward P/E ratio of 20.54, while IT has a forward P/E of 41.47. We also note that BAH has a PEG ratio of 1.54. 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. IT currently has a PEG ratio of 3.40.
Another notable valuation metric for BAH is its P/B ratio of 13.55. 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, IT has a P/B of 39.88.
These metrics, and several others, help BAH earn a Value grade of B, while IT has been given a Value grade of D.
BAH stands above IT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BAH is the superior value option right now.
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Free: See Our Top Stock And 4 Runners UpBooz Allen Hamilton Holding Corporation (BAH) : Free Stock Analysis Report
Gartner, Inc. (IT) : 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.
