Yahoo Finance TRU vs. BKI: Which Stock Should Value Investors Buy Now?
Investors interested in Business - Information Services stocks are likely familiar with TransUnion (TRU) and Black Knight (BKI). 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.
TransUnion and Black Knight are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TRU has an improving earnings outlook. 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.
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.
TRU currently has a forward P/E ratio of 15.76, while BKI has a forward P/E of 24.51. We also note that TRU has a PEG ratio of 0.51. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BKI currently has a PEG ratio of 2.93.
Another notable valuation metric for TRU is its P/B ratio of 2.75. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, BKI has a P/B of 3.79.
Based on these metrics and many more, TRU holds a Value grade of B, while BKI has a Value grade of D.
TRU stands above BKI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TRU is the superior value option right now.
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TransUnion (TRU) : Free Stock Analysis Report
Black Knight Financial Services, Inc. (BKI) : Free Stock Analysis Report
