PWR vs. JEC: Which Stock Is the Better Value Option?
Investors with an interest in Engineering - R and D Services stocks have likely encountered both Quanta Services (PWR) and Jacobs Engineering (JEC). But which of these two stocks presents investors with the better value opportunity right now? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, both Quanta Services and Jacobs Engineering are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
PWR currently has a forward P/E ratio of 11.02, while JEC has a forward P/E of 14.53. We also note that PWR has a PEG ratio of 1.38. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. JEC currently has a PEG ratio of 1.44.
Another notable valuation metric for PWR is its P/B ratio of 1.57. 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, JEC has a P/B of 1.84.
Based on these metrics and many more, PWR holds a Value grade of A, while JEC has a Value grade of C.
Both PWR and JEC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PWR is the superior value option right now.
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Quanta Services, Inc. (PWR): 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.