ALOT vs. TRI: Which Stock Is the Better Value Option?
Investors interested in stocks from the Technology Services sector have probably already heard of AstroNova (ALOT) and Thomson Reuters (TRI). But which of these two stocks presents investors with the better value opportunity right now? Let's 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.
Currently, AstroNova has a Zacks Rank of #2 (Buy), while Thomson Reuters has a Zacks Rank of #3 (Hold). This means that ALOT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
ALOT currently has a forward P/E ratio of 37, while TRI has a forward P/E of 50.98. We also note that ALOT has a PEG ratio of 3.08. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TRI currently has a PEG ratio of 4.23.
Another notable valuation metric for ALOT is its P/B ratio of 1.41. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, TRI has a P/B of 3.29.
Based on these metrics and many more, ALOT holds a Value grade of B, while TRI has a Value grade of C.
ALOT stands above TRI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ALOT is the superior value option right now.
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AstroNova, Inc. (ALOT) : Free Stock Analysis Report
Thomson Reuters Corp (TRI) : Free Stock Analysis Report
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