Investors looking for stocks in the Computers - IT Services sector might want to consider either ASGN Inc (ASGN) or ServiceNow (NOW). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
ASGN Inc has a Zacks Rank of #1 (Strong Buy), while ServiceNow has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that ASGN likely has seen a stronger improvement to its earnings outlook than NOW has recently. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
ASGN currently has a forward P/E ratio of 13.47, while NOW has a forward P/E of 73.32. We also note that ASGN has a PEG ratio of 1.14. 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. NOW currently has a PEG ratio of 2.62.
Another notable valuation metric for ASGN is its P/B ratio of 2.92. 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, NOW has a P/B of 40.17.
These are just a few of the metrics contributing to ASGN's Value grade of B and NOW's Value grade of F.
ASGN has seen stronger estimate revision activity and sports more attractive valuation metrics than NOW, so it seems like value investors will conclude that ASGN is the superior option right now.
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