Investors interested in Engineering - R and D Services stocks are likely familiar with Aecom Technology (ACM) and Jacobs Engineering (JEC). 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Both Aecom Technology and Jacobs Engineering have a Zacks Rank of # 2 (Buy) right now. 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 only part of the picture for value investors.
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 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.
ACM currently has a forward P/E ratio of 12.32, while JEC has a forward P/E of 16.94. We also note that ACM has a PEG ratio of 1.32. 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. JEC currently has a PEG ratio of 1.54.
Another notable valuation metric for ACM is its P/B ratio of 1.43. 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, JEC has a P/B of 2.09.
Based on these metrics and many more, ACM holds a Value grade of B, while JEC has a Value grade of C.
Both ACM and JEC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ACM is the superior value option right now.
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AECOM (ACM) : Free Stock Analysis Report
Jacobs Engineering Group Inc. (JEC) : Free Stock Analysis Report
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