PSN vs. VLTO: Which Stock Is the Better Value Option?
Investors interested in Technology Services stocks are likely familiar with Parsons (PSN) and Veralto (VLTO). 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.
Parsons and Veralto are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that PSN likely has seen a stronger improvement to its earnings outlook than VLTO has recently. But this is only part of the picture for value investors.
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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
PSN currently has a forward P/E ratio of 26.88, while VLTO has a forward P/E of 28.80. We also note that PSN has a PEG ratio of 2.08. 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. VLTO currently has a PEG ratio of 4.42.
Another notable valuation metric for PSN is its P/B ratio of 5.20. 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, VLTO has a P/B of 16.11.
Based on these metrics and many more, PSN holds a Value grade of B, while VLTO has a Value grade of D.
PSN 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 PSN is likely the superior value option right now.
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Parsons Corporation (PSN) : Free Stock Analysis Report
Veralto Corporation (VLTO) : Free Stock Analysis Report