Investors with an interest in Technology Services stocks have likely encountered both Aptiv (APTV) and SailPoint Technologies (SAIL). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Aptiv has a Zacks Rank of #2 (Buy), while SailPoint Technologies has a Zacks Rank of #3 (Hold) right now. This means that APTV's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.
APTV currently has a forward P/E ratio of 17.33, while SAIL has a forward P/E of 324.17. We also note that APTV has a PEG ratio of 1.29. 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. SAIL currently has a PEG ratio of 19.45.
Another notable valuation metric for APTV is its P/B ratio of 6.67. 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, SAIL has a P/B of 7.11.
Based on these metrics and many more, APTV holds a Value grade of B, while SAIL has a Value grade of F.
APTV stands above SAIL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that APTV is the superior value option right now.
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Aptiv PLC (APTV) : Free Stock Analysis Report
SailPoint Technologies Holdings, Inc. (SAIL) : Free Stock Analysis Report
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