Yahoo Finance SMGZY or RKT: Which Is the Better Value Stock Right Now?
Investors interested in Technology Services stocks are likely familiar with Smiths Group PLC (SMGZY) and Rocket Companies (RKT). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Smiths Group PLC is sporting a Zacks Rank of #2 (Buy), while Rocket Companies has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that SMGZY likely has seen a stronger improvement to its earnings outlook than RKT has recently. 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.
SMGZY currently has a forward P/E ratio of 15.54, while RKT has a forward P/E of 35.44. We also note that SMGZY has a PEG ratio of 1.65. 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. RKT currently has a PEG ratio of 7.09.
Another notable valuation metric for SMGZY is its P/B ratio of 2.47. 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, RKT has a P/B of 2.85.
These are just a few of the metrics contributing to SMGZY's Value grade of B and RKT's Value grade of C.
SMGZY stands above RKT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SMGZY is the superior value option right now.
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Smiths Group PLC (SMGZY) : Free Stock Analysis Report
Rocket Companies, Inc. (RKT) : Free Stock Analysis Report
