ASGN or DT: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Computers - IT Services sector have probably already heard of ASGN Inc (ASGN) and Dynatrace (DT). But which of these two stocks presents investors with the better value opportunity right now? Let's 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.
ASGN Inc and Dynatrace are both sporting 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 just one factor that value investors are interested in.
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.
ASGN currently has a forward P/E ratio of 17.72, while DT has a forward P/E of 81.35. We also note that ASGN has a PEG ratio of 1.86. 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. DT currently has a PEG ratio of 2.30.
Another notable valuation metric for ASGN is its P/B ratio of 3.10. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, DT has a P/B of 13.29.
These metrics, and several others, help ASGN earn a Value grade of B, while DT has been given a Value grade of F.
Both ASGN and DT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ASGN is the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
ASGN Incorporated (ASGN) : Free Stock Analysis Report
Dynatrace, Inc. (DT) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
